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.
At StockStory, our job is to help you avoid costly mistakes and stay on the right side of the trade. Keeping that in mind, here is one volatile stock that could reward patient investors and two best left to the gamblers.
Two Stocks to Sell:
Malibu Boats (MBUU)
Rolling One-Year Beta: 1.12
Founded in California in 1982, Malibu Boats (NASDAQ: MBUU) is a manufacturer of high-performance sports boats and luxury watercrafts.
Why Do We Avoid MBUU?
- Number of boats sold has disappointed over the past two years, indicating weak demand for its offerings
- Poor free cash flow margin of 6.2% for the last two years limits its freedom to invest in growth initiatives, execute share buybacks, or pay dividends
- Diminishing returns on capital from an already low starting point show that neither management’s prior nor current bets are going as planned
Malibu Boats’s stock price of $28.59 implies a valuation ratio of 21.1x forward P/E. To fully understand why you should be careful with MBUU, check out our full research report (it’s free for active Edge members).
Navient (NAVI)
Rolling One-Year Beta: 1.14
Spun off from Sallie Mae in 2014 to handle the company's loan servicing and collection operations, Navient (NASDAQ: NAVI) provides education loan servicing and business processing solutions that help manage federal student loans, private education loans, and government services.
Why Do We Think NAVI Will Underperform?
- Annual sales declines of 18.7% for the past five years show its products and services struggled to connect with the market during this cycle
- Earnings per share have dipped by 17.1% annually over the past five years, which is concerning because stock prices follow EPS over the long term
- Debt-to-equity ratio of 18.6× shows the firm has taken on excessive debt, leaving little room for error
At $12.78 per share, Navient trades at 12x forward P/E. If you’re considering NAVI for your portfolio, see our FREE research report to learn more.
One Stock to Watch:
Parker-Hannifin (PH)
Rolling One-Year Beta: 1.34
Founded in 1917, Parker Hannifin (NYSE: PH) is a manufacturer of motion and control systems for a wide variety of mobile, industrial and aerospace markets.
Why Should PH Be on Your Watchlist?
- Excellent operating margin of 18.2% highlights the efficiency of its business model, and it turbocharged its profits by achieving some fixed cost leverage
- Share repurchases over the last five years enabled its annual earnings per share growth of 20.7% to outpace its revenue gains
- Robust free cash flow margin of 14.8% gives it many options for capital deployment, and its improved cash conversion implies it’s becoming a less capital-intensive business
Parker-Hannifin is trading at $893.19 per share, or 28.5x forward P/E. Is now a good time to buy? Find out in our full research report, it’s free for active Edge members.
High-Quality Stocks for All Market Conditions
Your portfolio can’t afford to be based on yesterday’s story. The risk in a handful of heavily crowded stocks is rising daily.
The names generating the next wave of massive growth are right here in our Top 6 Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 244% over the last five years (as of June 30, 2025).
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,326% between June 2020 and June 2025) as well as under-the-radar businesses like the once-micro-cap company Kadant (+351% five-year return). Find your next big winner with StockStory today for free. Find your next big winner with StockStory today. Find your next big winner with StockStory today.
