A highly volatile stock can deliver big gains - or just as easily wipe out a portfolio if things go south. While some investors embrace risk, mistakes can be costly for those who aren’t prepared.

These stocks can be a rollercoaster, and StockStory is here to guide you through the ups and downs. That said, here are three volatile stocks to avoid and some better opportunities instead.

Park-Ohio (PKOH)

Rolling One-Year Beta: 1.21

Based in Cleveland, Park-Ohio (NASDAQ: PKOH) provides supply chain management services, capital equipment, and manufactured components.

Why Is PKOH Risky?

1. Sales stagnated over the last five years and signal the need for new growth strategies
2. Gross margin of 15.1% is below its competitors, leaving less money to invest in areas like marketing and R&D
3. 5.1 percentage point decline in its free cash flow margin over the last five years reflects the company’s increased investments to defend its market position

At $17.82 per share, Park-Ohio trades at 5.6x forward P/E. Check out our free in-depth research report to learn more about why PKOH doesn’t pass our bar.

Universal Logistics (ULH)

Rolling One-Year Beta: 1.16

Founded in 1932, Universal Logistics (NASDAQ: ULH) is a provider of customized transportation and logistics solutions operating throughout the United States and in Mexico, Canada, and Colombia.

Why Should You Sell ULH?

1. Customers postponed purchases of its products and services this cycle as its revenue declined by 5.1% annually over the last two years
2. Falling earnings per share over the last two years has some investors worried as stock prices ultimately follow EPS over the long term
3. Free cash flow margin shrank by 9.6 percentage points over the last five years, suggesting the company is consuming more capital to stay competitive

Universal Logistics’s stock price of $25.51 implies a valuation ratio of 8x forward P/E. Read our free research report to see why you should think twice about including ULH in your portfolio.

Ziff Davis (ZD)

Rolling One-Year Beta: 1.35

Originally a pioneering technology publisher founded in 1927 that became famous for PC Magazine, Ziff Davis (NASDAQ: ZD) operates a portfolio of digital media brands and subscription services across technology, shopping, gaming, healthcare, and cybersecurity markets.

Why Do We Pass on ZD?

1. Products and services are facing end-market challenges during this cycle, as seen in its flat sales over the last five years
2. Sales over the last five years were less profitable as its earnings per share fell by 1.6% annually while its revenue was flat
3. Free cash flow margin dropped by 17.6 percentage points over the last five years, implying the company became more capital intensive as competition picked up

Ziff Davis is trading at $31.62 per share, or 4.5x forward P/E. If you’re considering ZD for your portfolio, see our FREE research report to learn more.

High-Quality Stocks for All Market Conditions

Market indices reached historic highs following Donald Trump’s presidential victory in November 2024, but the outlook for 2025 is clouded by new trade policies that could impact business confidence and growth.

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