1 Volatile Stock with Solid Fundamentals and 2 We Avoid

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.

At StockStory, our job is to help you avoid costly mistakes and stay on the right side of the trade. That said, here is one volatile stock that could deliver huge gains and two best left to the gamblers.

Two Stocks to Sell:

DistributionNOW (DNOW)

Rolling One-Year Beta: 1.44

Spun off from National Oilwell Varco, DistributionNOW (NYSE:DNOW) provides distribution and supply chain solutions for the energy and industrial end markets.

Why Do We Think DNOW Will Underperform?

1. Flat sales over the last five years suggest it must find different ways to grow during this cycle
2. Earnings per share have dipped by 4.9% annually over the past two years, which is concerning because stock prices follow EPS over the long term
3. Low returns on capital reflect management’s struggle to allocate funds effectively

DistributionNOW’s stock price of $15.09 implies a valuation ratio of 18x forward EV-to-EBITDA. Read our free research report to see why you should think twice about including DNOW in your portfolio.

Vestis (VSTS)

Rolling One-Year Beta: 1.44

Operating a network of more than 350 facilities with 3,300 delivery routes serving customers weekly, Vestis (NYSE:VSTS) provides uniform rentals, workplace supplies, and facility services to over 300,000 business locations across the United States and Canada.

Why Are We Out on VSTS?

1. Sales tumbled by 1.5% annually over the last two years, showing market trends are working against its favor during this cycle
2. Free cash flow margin dropped by 9.8 percentage points over the last four years, implying the company became more capital intensive as competition picked up
3. High net-debt-to-EBITDA ratio of 5× could force the company to raise capital at unfavorable terms if market conditions deteriorate

Vestis is trading at $4.15 per share, or 11.9x forward P/E. To fully understand why you should be careful with VSTS, check out our full research report (it’s free).

One Stock to Watch:

Tecnoglass (TGLS)

Rolling One-Year Beta: 1.57

The first-ever Colombian company to trade on the NASDAQ, Tecnoglass (NYSE:TGLS) is a manufacturer of architectural glass, windows, and aluminum products.

Why Do We Like TGLS?

1. Annual revenue growth of 20.3% over the last five years was superb and indicates its market share increased during this cycle
2. Highly efficient business model is illustrated by its impressive 27.3% operating margin, and its profits increased over the last five years as it scaled
3. Market-beating returns on capital illustrate that management has a knack for investing in profitable ventures, and its returns are climbing as it finds even more attractive growth opportunities

At $68.90 per share, Tecnoglass trades at 15.6x forward P/E. Is now a good time to buy? See for yourself in our full research report, it’s free.

High-Quality Stocks for All Market Conditions

Donald Trump’s April 2025 "Liberation Day" tariffs sent markets into a tailspin, but stocks have since rebounded strongly, proving that knee-jerk reactions often create the best buying opportunities.

The smart money is already positioning for the next leg up. Don’t miss out on the recovery - check out 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 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-micro-cap company Tecnoglass (+1,754% 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

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