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. Keeping that in mind, here is one volatile stock with massive upside potential and two best left to the gamblers.
Two Stocks to Sell:
Microchip Technology (MCHP)
Rolling One-Year Beta: 2.06
Spun out from General Instrument in 1987, Microchip Technology (NASDAQ: MCHP) is a leading provider of microcontrollers and integrated circuits used mainly in the automotive world, especially in electric vehicles and their charging devices.
Why Do We Steer Clear of MCHP?
- Customers postponed purchases of its products and services this cycle as its revenue declined by 4.2% annually over the last five years
- Performance over the past five years shows each sale was less profitable as its earnings per share dropped by 20.6% annually, worse than its revenue
- Free cash flow margin dropped by 14.5 percentage points over the last five years, implying the company became more capital intensive as competition picked up
Microchip Technology’s stock price of $53.50 implies a valuation ratio of 27.3x forward P/E. To fully understand why you should be careful with MCHP, check out our full research report (it’s free for active Edge members).
The Toro Company (TTC)
Rolling One-Year Beta: 1.18
Ceasing all production to support the war effort during World War II, Toro (NYSE:TTC) offers outdoor equipment for residential, commercial, and agricultural use.
Why Is TTC Risky?
- Products and services are facing significant end-market challenges during this cycle as sales have declined by 2.4% annually over the last two years
- Free cash flow margin shrank by 5.6 percentage points over the last five years, suggesting the company is consuming more capital to stay competitive
- Eroding returns on capital suggest its historical profit centers are aging
At $70.53 per share, The Toro Company trades at 15.3x forward P/E. Dive into our free research report to see why there are better opportunities than TTC.
One Stock to Buy:
Evercore (EVR)
Rolling One-Year Beta: 1.93
Founded in 1995 as a boutique advisory firm focused on independence and client trust, Evercore (NYSE:EVR) is an independent investment banking firm that provides strategic advisory, capital markets, and wealth management services to corporations, financial sponsors, and high-net-worth individuals.
Why Should You Buy EVR?
- Annual revenue growth of 19.5% over the past two years was outstanding, reflecting market share gains this cycle
- Incremental sales significantly boosted profitability as its annual earnings per share growth of 27.1% over the last two years outstripped its revenue performance
- Industry-leading 34.6% return on equity demonstrates management’s skill in finding high-return investments
Evercore is trading at $317.15 per share, or 19.5x forward P/E. Is now a good time to buy? See for yourself in our full research report, it’s free for active Edge members.
Stocks We Like Even More
Your portfolio can’t afford to be based on yesterday’s story. The risk in a handful of heavily crowded stocks is rising daily.
The names generating the next wave of massive growth are right here in our Top 9 Market-Beating Stocks. This is a curated list of our High Quality stocks that have generated a market-beating return of 244% over the last five years (as of June 30, 2025).
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,326% between June 2020 and June 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. Find your next big winner with StockStory today. Find your next big winner with StockStory today
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