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.

Navigating these stocks isn’t easy, which is why StockStory helps you find Comfort In Chaos. Keeping that in mind, here are three volatile stocks best left to the gamblers and some better opportunities instead.

Dillard's (DDS)

Rolling One-Year Beta: 1.08

With stores located largely in the Southern and Western US, Dillard’s (NYSE: DDS) is a department store chain that sells clothing, cosmetics, accessories, and home goods.

Why Are We Hesitant About DDS?

1. Poor same-store sales performance over the past two years indicates it’s having trouble bringing new shoppers into its brick-and-mortar locations
2. Forecasted revenue decline of 2.4% for the upcoming 12 months implies demand will fall off a cliff
3. Expenses have increased as a percentage of revenue over the last year as its operating margin fell by 2.1 percentage points

Dillard's is trading at $471.06 per share, or 11.3x forward EV-to-EBITDA. Dive into our free research report to see why there are better opportunities than DDS.

Lincoln Electric (LECO)

Rolling One-Year Beta: 1.22

Headquartered in Ohio, Lincoln Electric (NASDAQ: LECO) manufactures and sells welding equipment for various industries.

Why Does LECO Give Us Pause?

1. Absence of organic revenue growth over the past two years suggests it may have to lean into acquisitions to drive its expansion
2. Estimated sales growth of 6.4% for the next 12 months is soft and implies weaker demand
3. Earnings growth underperformed the sector average over the last two years as its EPS grew by just 5.2% annually

Lincoln Electric’s stock price of $239.47 implies a valuation ratio of 24.6x forward P/E. If you’re considering LECO for your portfolio, see our FREE research report to learn more.

Pitney Bowes (PBI)

Rolling One-Year Beta: 1.55

With a century-long history dating back to 1920 and processing over 15 billion pieces of mail annually, Pitney Bowes (NYSE: PBI) provides shipping, mailing technology, logistics, and financial services to businesses of all sizes.

Why Are We Wary of PBI?

1. Products and services are facing significant end-market challenges during this cycle as sales have declined by 9.5% annually over the last five years
2. Projected sales decline of 1.3% over the next 12 months indicates demand will continue deteriorating
3. High net-debt-to-EBITDA ratio of 5× increases the risk of forced asset sales or dilutive financing if operational performance weakens

At $11.18 per share, Pitney Bowes trades at 8.7x forward P/E. To fully understand why you should be careful with PBI, check out our full research report (it’s free).

High-Quality Stocks for All Market Conditions

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