Volatility cuts both ways - while it creates opportunities, it also increases risk, making sharp declines just as likely as big gains. This unpredictability can shake out even the most experienced investors.
Navigating these stocks isn’t easy, which is why StockStory helps you find Comfort In Chaos. Keeping that in mind, here is one volatile stock that could deliver huge gains and two best left to the gamblers.
Two Stocks to Sell:
The ONE Group (STKS)
Rolling One-Year Beta: 1.68
Doubling as a hospitality services provider for hotels and resorts, The One Group Hospitality (NASDAQ: STKS) is an upscale restaurant company that operates STK Steakhouse and Kona Grill.
Why Do We Think Twice About STKS?
- Poor same-store sales performance over the past two years indicates it’s having trouble bringing new diners into its restaurants
- Earnings per share fell by 19.9% annually over the last five years while its revenue grew, partly because it diluted shareholders
- High net-debt-to-EBITDA ratio of 8× increases the risk of forced asset sales or dilutive financing if operational performance weakens
At $2.79 per share, The ONE Group trades at 0.8x forward EV-to-EBITDA. Dive into our free research report to see why there are better opportunities than STKS.
Tandem Diabetes (TNDM)
Rolling One-Year Beta: 1.25
With technology that automatically adjusts insulin delivery based on continuous glucose monitoring data, Tandem Diabetes Care (NASDAQ: TNDM) develops and manufactures automated insulin delivery systems that help people with diabetes manage their blood glucose levels.
Why Should You Sell TNDM?
- Declining pump shipments over the past two years indicate demand is soft and that the company may need to revise its strategy
- Revenue growth over the past five years was nullified by the company’s new share issuances as its earnings per share fell by 34.7% annually
- Waning returns on capital from an already weak starting point displays the inefficacy of management’s past and current investment decisions
Tandem Diabetes’s stock price of $16.50 implies a valuation ratio of 30.9x forward EV-to-EBITDA. Check out our free in-depth research report to learn more about why TNDM doesn’t pass our bar.
One Stock to Buy:
Nova (NVMI)
Rolling One-Year Beta: 2.01
Headquartered in Israel, Nova (NASDAQ: NVMI) is a provider of quality control systems used in semiconductor manufacturing.
Why Are We Bullish on NVMI?
- Impressive 24.5% annual revenue growth over the last five years indicates it’s winning market share this cycle
- Free cash flow margin jumped by 12.3 percentage points over the last five years, giving the company more resources to pursue growth initiatives, repurchase shares, or pay dividends
- Industry-leading 31.4% return on capital demonstrates management’s skill in finding high-return investments
Nova is trading at $174.41 per share, or 22.7x forward price-to-earnings. Is now the time to initiate a position? Find out in our full research report, it’s free.
Stocks We Like Even More
Donald Trump’s victory in the 2024 U.S. Presidential Election sent major indices to all-time highs, but stocks have retraced as investors debate the health of the economy and the potential impact of tariffs.
While this leaves much uncertainty around 2025, a few companies are poised for long-term gains regardless of the political or macroeconomic climate, like our Top 5 Strong Momentum Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 175% over the last five years.
Stocks that made our list in 2019 include now familiar names such as Nvidia (+2,183% between December 2019 and December 2024) as well as under-the-radar businesses like Axon (+711% five-year return). Find your next big winner with StockStory today for free.
