In This Article:
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.
These stocks can be a rollercoaster, and StockStory is here to guide you through the ups and downs. 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:
RH (RH)
Rolling One-Year Beta: 2.45
Formerly known as Restoration Hardware, RH (NYSE:RH) is a specialty retailer that exclusively sells its own brand of high-end furniture and home decor.
Why Is RH Not Exciting?
-
Disappointing same-store sales over the past two years show customers aren’t responding well to its product selection and store experience
-
Earnings per share fell by 14.5% annually over the last five years while its revenue grew, showing its incremental sales were much less profitable
-
Limited cash reserves may force the company to seek unfavorable financing terms that could dilute shareholders
RH is trading at $206.15 per share, or 16.7x forward P/E. If you’re considering RH for your portfolio, see our FREE research report to learn more.
Corning (GLW)
Rolling One-Year Beta: 1.38
Supplying windows for some of the United States’s earliest spacecraft, Corning (NYSE:GLW) provides glass and other electronic components for the consumer electronics, telecommunications, automotive, and healthcare industries.
Why Should You Sell GLW?
-
Scale is a double-edged sword because it limits the company’s growth potential compared to its smaller competitors, as reflected in its below-average annual revenue increases of 1% for the last two years
-
4 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
-
Below-average returns on capital indicate management struggled to find compelling investment opportunities, and its falling returns suggest its earlier profit pools are drying up
Corning’s stock price of $47.70 implies a valuation ratio of 20.1x forward P/E. Check out our free in-depth research report to learn more about why GLW doesn’t pass our bar.
One Stock to Buy:
Robinhood (HOOD)
Rolling One-Year Beta: 3.38
With a mission to democratize finance, Robinhood (NASDAQ:HOOD) is an online consumer finance platform known for its commission-free stock and crypto trading.
Why Should You Buy HOOD?
-
Customers are spending more money on its platform as its average revenue per user has increased by 43.1% annually over the last two years
-
Performance over the past three years shows its incremental sales were extremely profitable, as its annual earnings per share growth of 41.2% outpaced its revenue gains
-
Free cash flow margin grew by 1,103.9 percentage points over the last few years, giving the company more chips to play with