1 Volatile Stock with Impressive Fundamentals and 2 to Keep Off Your Radar

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.

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 that could just as easily collapse.

Two Stocks to Sell:

Semtech (SMTC)

Rolling One-Year Beta: 2.42

A public company since the late 1960s, Semtech (NASDAQ:SMTC) is a provider of analog and mixed-signal semiconductors used for Internet of Things systems and cloud connectivity.

Why Do We Think SMTC Will Underperform?

1. Mounting Operating losses demonstrate the tradeoff between growth and profitability
2. Increased cash burn over the last five years raises questions about the return timeline for its investments
3. Push for growth has led to negative returns on capital, signaling value destruction, and its decreasing returns suggest its historical profit centers are aging

Semtech’s stock price of $32.34 implies a valuation ratio of 19.2x forward P/E. Dive into our free research report to see why there are better opportunities than SMTC.

Universal Logistics (ULH)

Rolling One-Year Beta: 1.61

Founded in 1932, Universal Logistics (NASDAQ:ULH) is a provider of customized transportation and logistics solutions operating throughout the United States and in Mexico, Canada, and Colombia.

Why Do We Pass on ULH?

1. Annual sales declines of 5.1% for the past two years show its products and services struggled to connect with the market during this cycle
2. Falling earnings per share over the last two years has some investors worried as stock prices ultimately follow EPS over the long term
3. Free cash flow margin shrank by 9.6 percentage points over the last five years, suggesting the company is consuming more capital to stay competitive

At $22.39 per share, Universal Logistics trades at 7.1x forward P/E. Check out our free in-depth research report to learn more about why ULH doesn’t pass our bar.

One Stock to Buy:

Blue Bird (BLBD)

Rolling One-Year Beta: 1.55

With around a century of experience, Blue Bird (NASDAQ:BLBD) is a manufacturer of school buses and complementary parts.

Why Is BLBD a Good Business?

1. Operating margin improvement of 7.6 percentage points over the last five years demonstrates its ability to scale efficiently
2. Additional sales over the last two years increased its profitability as the 113% annual growth in its earnings per share outpaced its revenue
3. Improving returns on capital reflect management’s ability to monetize investments

Blue Bird is trading at $36 per share, or 8.7x forward P/E. Is now a good time to buy? See for yourself in our full research report, it’s free.

Stocks That Overcame Trump’s 2018 Tariffs

Market indices reached historic highs following Donald Trump’s presidential victory in November 2024, but the outlook for 2025 is clouded by new trade policies that could impact business confidence and growth.

While this has caused many investors to adopt a "fearful" wait-and-see approach, we’re leaning into our best ideas that can grow regardless of the political or macroeconomic climate. Take advantage of Mr. Market by checking out our 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 175% over the last five years.

Stocks that made our list in 2019 include now familiar names such as Nvidia (+2,183% between December 2019 and December 2024) as well as under-the-radar businesses like Comfort Systems (+751% five-year return). Find your next big winner with StockStory today for free.