3 Volatile Stocks We Think Twice About

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.

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 steer clear of and a few better alternatives.

MarineMax (HZO)

Rolling One-Year Beta: 1.92

Appropriately headquartered in Clearwater, Florida, MarineMax (NYSE:HZO) sells boats, yachts, and other marine products.

Why Does HZO Give Us Pause?

1. Ongoing store closures and lackluster same-store sales indicate sluggish demand and a focus on consolidation
2. Weak same-store sales trends over the past two years suggest there may be few opportunities in its core markets to open new locations
3. Short cash runway increases the probability of a capital raise that dilutes existing shareholders

MarineMax’s stock price of $26.11 implies a valuation ratio of 16.6x forward P/E. Read our free research report to see why you should think twice about including HZO in your portfolio.

SunOpta (STKL)

Rolling One-Year Beta: 1.28

Committed to clean-label foods, SunOpta (NASDAQ:STKL) is a sustainability-focused food and beverage company specializing in the sourcing, processing, and packaging of organic products.

Why Are We Cautious About STKL?

1. Annual revenue declines of 4.9% over the last three years indicate problems with its market positioning
2. Revenue base of $763.2 million puts it at a disadvantage compared to larger competitors exhibiting economies of scale
3. Easily substituted products (and therefore stiff competition) result in an inferior gross margin of 15.6% that must be offset through higher volumes

SunOpta is trading at $5.88 per share, or 24.4x forward P/E. Check out our free in-depth research report to learn more about why STKL doesn’t pass our bar.

Triumph Financial (TFIN)

Rolling One-Year Beta: 1.30

Originally focused on traditional banking before pivoting to serve the transportation sector, Triumph Financial (NASDAQ:TFIN) provides specialized financial services to the trucking industry, including payments processing, factoring, banking, and data intelligence solutions.

Why Are We Hesitant About TFIN?

1. 5.3% annual net interest income growth over the last five years was slower than its banking peers
2. Net interest margin dropped by 130.7 basis points (100 basis points = 1 percentage point) over the last two years, implying the firm’s loan book profitability fell as competitors entered the market
3. Performance over the past five years shows its incremental sales were much less profitable, as its earnings per share fell by 22.1% annually

At $60.98 per share, Triumph Financial trades at 1.6x forward P/B. To fully understand why you should be careful with TFIN, check out our full research report (it’s free for active Edge members).

Stocks We Like More

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