
1 Volatile Stock for Long-Term Investors and 2 to Keep Off Your Radar
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.
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 that could deliver huge gains and two best left to the gamblers.
Two Stocks to Sell:
SiteOne (SITE)
Rolling One-Year Beta: 1.58
Known for distributing John Deere tractors and LESCO turf care products, SiteOne Landscape Supply (NYSE:SITE) provides landscaping products and services to professionals, including irrigation, lighting, and nursery supplies.
Why Does SITE Give Us Pause?
-
Core business is underperforming as its organic revenue has disappointed over the past two years, suggesting it might need acquisitions to stimulate growth
-
Earnings per share fell by 22.6% annually over the last two years while its revenue grew, showing its incremental sales were much less profitable
-
Shrinking returns on capital suggest that increasing competition is eating into the company’s profitability
At $114.85 per share, SiteOne trades at 28x forward price-to-earnings. If you’re considering SITE for your portfolio, see our FREE research report to learn more .
Mirion (MIR)
Rolling One-Year Beta: 1.63
With its technology protecting workers in over 130 countries and equipment used in 80% of cancer centers worldwide, Mirion Technologies (NYSE:MIR) provides radiation detection, measurement, and monitoring solutions for medical, nuclear energy, defense, and scientific research applications.
Why Do We Think Twice About MIR?
-
Modest revenue base of $860.8 million gives it less fixed cost leverage and fewer distribution channels than larger companies
-
Costs have risen faster than its revenue over the last five years, causing its operating margin to decline by 7.6 percentage points
-
Below-average returns on capital indicate management struggled to find compelling investment opportunities
Mirion is trading at $14.22 per share, or 29.6x forward price-to-earnings. To fully understand why you should be careful with MIR, check out our full research report (it’s free) .
One Stock to Buy:
Core & Main (CNM)
Rolling One-Year Beta: 1.40
Formerly a division of industrial distributor HD Supply, Core & Main (NYSE:CNM) is a provider of water, wastewater, and fire protection products and services.
Why Is CNM a Good Business?
-
Market share has increased this cycle as its 17% annual revenue growth over the last five years was exceptional
-
Operating margin expanded by 4.7 percentage points over the last five years as it scaled and became more efficient
-
Share repurchases have amplified shareholder returns as its annual earnings per share growth of 60.2% exceeded its revenue gains over the last five years