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 that could reward patient investors and two that could just as easily collapse.
Two Stocks to Sell:
Funko (FNKO)
Rolling One-Year Beta: 1.55
Boasting partnerships with media franchises like Marvel and One Piece, Funko (NASDAQ: FNKO) is a company specializing in creating and distributing licensed pop culture collectibles.
Why Do We Think FNKO Will Underperform?
- 7.7% annual revenue growth over the last five years was slower than its consumer discretionary peers
- Shrinking returns on capital from an already weak position reveal that neither previous nor ongoing investments are yielding the desired results
- 7× net-debt-to-EBITDA ratio makes lenders less willing to extend additional capital, potentially necessitating dilutive equity offerings
At $3.50 per share, Funko trades at 5x forward EV-to-EBITDA. Dive into our free research report to see why there are better opportunities than FNKO.
3M (MMM)
Rolling One-Year Beta: 1.28
Producers of the first asthma inhaler, 3M Company (NYSE: MMM) is a global conglomerate known for products in industries like healthcare, safety, electronics, and consumer goods.
Why Do We Avoid MMM?
- Organic revenue growth fell short of our benchmarks over the past two years and implies it may need to improve its products, pricing, or go-to-market strategy
- Projected sales growth of 2.9% for the next 12 months suggests sluggish demand
- Earnings per share have dipped by 1.5% annually over the past five years, which is concerning because stock prices follow EPS over the long term
3M is trading at $163.50 per share, or 19.2x forward P/E. Check out our free in-depth research report to learn more about why MMM doesn’t pass our bar.
One Stock to Watch:
Charles Schwab (SCHW)
Rolling One-Year Beta: 1.12
Founded in 1971 as a disruptive force challenging Wall Street's high fees and limited access, Charles Schwab (NYSE: SCHW) is a wealth management and brokerage firm that provides investment services, banking, and financial advice to individual investors and independent advisors.
Why Is SCHW Interesting?
- Annual revenue growth of 17.8% over the last five years was superb and indicates its market share increased during this cycle
- Earnings per share grew by 14.5% annually over the last five years and topped the peer group average
- ROE punches in at 13.9%, illustrating management’s expertise in identifying profitable investments
Charles Schwab’s stock price of $103.78 implies a valuation ratio of 18.5x forward P/E. Is now the time to initiate a position? Find out 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 Exlservice (+354% 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.
