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 with massive upside potential and two that could just as easily collapse.
Two Stocks to Sell:
Himax (HIMX)
Rolling One-Year Beta: 2.28
Taiwan-based Himax Technologies (NASDAQ:HIMX) is a leading manufacturer of display driver chips and timing controllers used in TVs, laptops, and mobile phones.
Why Does HIMX Fall Short?
- Annual sales declines of 5.9% for the past two years show its products and services struggled to connect with the market during this cycle
- Sales are projected to tank by 7.1% over the next 12 months as its demand continues evaporating
- Substandard operating profitability and its deterioration over the last five years limit its responsiveness to unforeseen market trends
At $8.13 per share, Himax trades at 23.6x forward P/E. Read our free research report to see why you should think twice about including HIMX in your portfolio.
FARO (FARO)
Rolling One-Year Beta: 2.54
Launched by two PhD students in a garage, FARO (NASDAQ:FARO) provides 3D measurement and imaging systems for the manufacturing, construction, engineering, and public safety industries.
Why Are We Wary of FARO?
- Sales tumbled by 1.5% annually over the last five years, showing market trends are working against its favor during this cycle
- Historical operating losses point to an inefficient cost structure
- Cash burn makes us question whether it can achieve sustainable long-term growth
FARO’s stock price of $42.19 implies a valuation ratio of 38.1x forward P/E. Check out our free in-depth research report to learn more about why FARO doesn’t pass our bar.
One Stock to Watch:
Dutch Bros (BROS)
Rolling One-Year Beta: 2.23
Started in 1992 by two brothers as a single pushcart, Dutch Bros (NYSE:BROS) is a dynamic coffee chain that’s captured the hearts of coffee enthusiasts across the United States.
Why Should BROS Be on Your Watchlist?
- Offensive push to build new restaurants and attack its untapped market opportunities is backed by its same-store sales growth
- Same-store sales growth averaged 5.2% over the past two years, showing it’s bringing new and repeat diners into its restaurants
- Revenue outlook for the upcoming 12 months is outstanding and shows it’s on track to gain market share
Dutch Bros is trading at $72.00 per share, or 114.4x forward P/E. Is now the time to initiate a position? See for yourself in our full research report, it’s free.
High-Quality Stocks for All Market Conditions
The market surged in 2024 and reached record highs after Donald Trump’s presidential victory in November, but questions about new economic policies are adding much uncertainty for 2025.
While the crowd speculates what might happen next, we’re homing in on the companies that can succeed regardless of the political or macroeconomic environment. Put yourself in the driver’s seat and build a durable portfolio by checking 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 176% over the last five years.
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.