Market swings can be tough to stomach, and volatile stocks often experience exaggerated moves in both directions. While many thrive during risk-on environments, many also struggle to maintain investor confidence when the ride gets bumpy.
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 with massive upside potential and two best left to the gamblers.
Rolling One-Year Beta: 2.04
Acquiring Goodyear’s farm tire business in 2005, Titan (NSYE:TWI) is a manufacturer and supplier of wheels, tires, and undercarriages used in off-highway vehicles such as construction vehicles.
Why Do We Avoid TWI?
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Sales tumbled by 3.7% annually over the last two years, showing market trends are working against its favor during this cycle
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Earnings per share decreased by more than its revenue over the last two years, showing each sale was less profitable
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Eroding returns on capital suggest its historical profit centers are aging
Titan International’s stock price of $8.65 implies a valuation ratio of 70x forward P/E. To fully understand why you should be careful with TWI, check out our full research report (it’s free for active Edge members).
Rolling One-Year Beta: 1.55
Helping create one of the most memorable moments for the iconic “Jurassic Park” film, Gates (NYSE:GTES) offers power transmission and fluid transfer equipment for various industries.
Why Does GTES Give Us Pause?
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Absence of organic revenue growth over the past two years suggests it may have to lean into acquisitions to drive its expansion
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Anticipated sales growth of 3.6% for the next year implies demand will be shaky
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Low returns on capital reflect management’s struggle to allocate funds effectively
At $22.34 per share, Gates Industrial Corporation trades at 14.5x forward P/E. Dive into our free research report to see why there are better opportunities than GTES.
Rolling One-Year Beta: 1.43
Providing body cameras and tasers for first responders, AXON (NASDAQ:AXON) develops technology solutions and weapons products for military, law enforcement, and civilians.
Why Is AXON a Top Pick?
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Products are reaching more customers as its unit sales averaged 26.3% growth over the past two years
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Operating profits increased over the last five years as the company gained some leverage on its fixed costs and became more efficient
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Earnings growth has trumped its peers over the last two years as its EPS has compounded at 35.2% annually