A highly volatile stock can deliver big gains - or just as easily wipe out a portfolio if things go south. While some investors embrace risk, mistakes can be costly for those who aren’t prepared.
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 are three volatile stocks to avoid and some better opportunities instead.
BeautyHealth (SKIN)
Rolling One-Year Beta: 1.75
Operating in the emerging beauty health category, the appropriately named BeautyHealth (NASDAQ:SKIN) is a skincare company best known for its Hydrafacial product that cleanses and hydrates skin.
Why Do We Steer Clear of SKIN?
- Products have few die-hard fans as sales have declined by 4.4% annually over the last three years
- Revenue base of $301.9 million puts it at a disadvantage compared to larger competitors exhibiting economies of scale
- Suboptimal cost structure is highlighted by its history of operating margin losses
At $1.39 per share, BeautyHealth trades at 9.3x forward EV-to-EBITDA. If you’re considering SKIN for your portfolio, see our FREE research report to learn more.
IAC (IAC)
Rolling One-Year Beta: 1.25
Originally known as InterActiveCorp and built through Barry Diller's strategic acquisitions since the 1990s, IAC (NASDAQ:IAC) operates a portfolio of category-leading digital businesses including Dotdash Meredith, Angi, and Care.com, focusing on digital publishing, home services, and caregiving platforms.
Why Do We Think IAC Will Underperform?
- Products and services are facing significant end-market challenges during this cycle as sales have declined by 15% annually over the last two years
- Earnings per share have dipped by 19.6% annually over the past five years, which is concerning because stock prices follow EPS over the long term
- Negative returns on capital show management lost money while trying to expand the business
IAC is trading at $38.69 per share, or 27.2x forward P/E. Dive into our free research report to see why there are better opportunities than IAC.
Invesco (IVZ)
Rolling One-Year Beta: 1.41
With roots dating back to 1935 when it pioneered the first mutual fund with an objective of capital growth, Invesco (NYSE:IVZ) is a global asset management firm that offers investment solutions across equities, fixed income, alternatives, and multi-asset strategies.
Why Is IVZ Risky?
- Flat sales over the last five years suggest it must find different ways to grow during this cycle
- Flat earnings per share over the last five years underperformed the sector average
- ROE of 5.8% reflects management’s challenges in identifying attractive investment opportunities
Invesco’s stock price of $26.25 implies a valuation ratio of 11x forward P/E. Read our free research report to see why you should think twice about including IVZ in your portfolio.
High-Quality Stocks for All Market Conditions
The market’s up big this year - but there’s a catch. Just 4 stocks account for half the S&P 500’s entire gain. That kind of concentration makes investors nervous, and for good reason. While everyone piles into the same crowded names, smart investors are hunting quality where no one’s looking - and paying a fraction of the price. Check out the high-quality names we’ve flagged 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.