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. Keeping that in mind, here is one volatile stock with massive upside potential and two that might not be worth the risk.
Two Stocks to Sell:
Graham Corporation (GHM)
Rolling One-Year Beta: 1.43
Founded when its founder patented a unique design for a vacuum system used in the sugar refining process, Graham (NYSE: GHM) provides vacuum and heat transfer equipment for the energy, petrochemical, refining, and chemical sectors.
Why Is GHM Not Exciting?
- Poor expense management has led to an operating margin of 2.3% that is below the industry average
- Low returns on capital reflect management’s struggle to allocate funds effectively
- Unfavorable liquidity position could lead to additional equity financing that dilutes shareholders
At $59.07 per share, Graham Corporation trades at 36.9x forward P/E. If you’re considering GHM for your portfolio, see our FREE research report to learn more.
U.S. Physical Therapy (USPH)
Rolling One-Year Beta: 1.31
With a nationwide footprint spanning 671 clinics across 42 states, U.S. Physical Therapy (NYSE: USPH) operates a network of outpatient physical therapy clinics and provides industrial injury prevention services to employers across the United States.
Why Are We Hesitant About USPH?
- Modest revenue base of $758.7 million gives it less fixed cost leverage and fewer distribution channels than larger companies
- 8.6 percentage point decline in its free cash flow margin over the last five years reflects the company’s increased investments to defend its market position
- Waning returns on capital imply its previous profit engines are losing steam
U.S. Physical Therapy is trading at $71.77 per share, or 25.2x forward P/E. Read our free research report to see why you should think twice about including USPH in your portfolio.
One Stock to Watch:
Northwest Pipe (NWPX)
Rolling One-Year Beta: 1.13
Playing a large role in the Integrated Pipeline (IPL) project in Texas to deliver ~350 million gallons of water per day, Northwest Pipe (NASDAQ: NWPX) is a manufacturer of pipeline systems for water infrastructure.
Why Are We Fans of NWPX?
- Market share has increased this cycle as its 12.5% annual revenue growth over the last five years was exceptional
- Share repurchases over the last two years enabled its annual earnings per share growth of 19.9% to outpace its revenue gains
- Free cash flow margin jumped by 13.7 percentage points over the last five years, giving the company more resources to pursue growth initiatives, repurchase shares, or pay dividends
Northwest Pipe’s stock price of $57.28 implies a valuation ratio of 15.4x 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
If your portfolio success hinges on just 4 stocks, your wealth is built on fragile ground. You have a small window to secure high-quality assets before the market widens and these prices disappear.
Don’t wait for the next volatility shock. Check out our Top 5 Strong Momentum Stocks for this week. 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-micro-cap company Tecnoglass (+1,754% 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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