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. That said, here are three volatile stocks to avoid and some better opportunities instead.
Cars.com (CARS)
Rolling One-Year Beta: 1.08
Originally started as a joint venture between several media companies including The Washington Post and The New York Times, Cars.com (NYSE: CARS) is a digital marketplace that connects new and used car buyers and sellers.
Why Does CARS Give Us Pause?
- Increasing competition is redirecting attention to other platforms as it failed to grow its dealer customers over the last two years
- Estimated sales growth of 1.5% for the next 12 months implies demand will slow from its three-year trend
- Earnings growth underperformed the sector average over the last three years as its EPS grew by just 1.9% annually
At $12.42 per share, Cars.com trades at 3.6x forward EV/EBITDA. Check out our free in-depth research report to learn more about why CARS doesn’t pass our bar.
L.B. Foster (FSTR)
Rolling One-Year Beta: 1.33
Founded with a $2,500 loan, L.B. Foster (NASDAQ: FSTR) is a provider of products and services for the transportation and energy infrastructure sectors, including rail products, construction materials, and coating solutions.
Why Should You Dump FSTR?
- Annual sales declines of 2.3% for the past five years show its products and services struggled to connect with the market during this cycle
- Lacking free cash flow generation means it has few chances to reinvest for growth, repurchase shares, or distribute capital
- Below-average returns on capital indicate management struggled to find compelling investment opportunities
L.B. Foster’s stock price of $22.40 implies a valuation ratio of 5.3x forward EV-to-EBITDA. To fully understand why you should be careful with FSTR, check out our full research report (it’s free).
3M (MMM)
Rolling One-Year Beta: 1.08
Producers of the first asthma inhaler, 3M Company (NYSE: MMM) is a global conglomerate known for products in industries like healthcare, safety, electronics, and consumer goods.
Why Should You Sell MMM?
- Absence of organic revenue growth over the past two years suggests it may have to lean into acquisitions to drive its expansion
- Earnings per share have dipped by 2.2% annually over the past five years, which is concerning because stock prices follow EPS over the long term
- Diminishing returns on capital from an already low starting point show that neither management’s prior nor current bets are going as planned
3M is trading at $144.90 per share, or 18x forward P/E. If you’re considering MMM for your portfolio, see our FREE research report to learn more.
High-Quality Stocks for All Market Conditions
When Trump unveiled his aggressive tariff plan in April 2025, markets tanked as investors feared a full-blown trade war. But those who panicked and sold missed the subsequent rebound that’s already erased most losses.
Don’t let fear keep you from great opportunities and take a look at Top 5 Growth Stocks for this month. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025).
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-small-cap company Comfort Systems (+782% five-year return). Find your next big winner with StockStory today for free.
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