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.
Navigating these stocks isn’t easy, which is why StockStory helps you find Comfort In Chaos. That said, here are three volatile stocks to steer clear of and a few better alternatives.
Magnachip (MX)
Rolling One-Year Beta: 2.32
With its technology found in common consumer electronics such as TVs and smartphones, Magnachip Semiconductor (NYSE: MX) is a provider of analog and mixed-signal semiconductors.
Why Do We Pass on MX?
- Products and services are facing significant end-market challenges during this cycle as sales have declined by 16.2% annually over the last five years
- Falling earnings per share over the last five years has some investors worried as stock prices ultimately follow EPS over the long term
- Free cash flow margin dropped by 13 percentage points over the last five years, implying the company became more capital intensive as competition picked up
Magnachip is trading at $3.05 per share, or 0.6x forward price-to-sales. Check out our free in-depth research report to learn more about why MX doesn’t pass our bar.
Quest Resource (QRHC)
Rolling One-Year Beta: 1.36
Recycling corporate waste to help companies be more sustainable, Quest Resource (NASDAQ: QRHC) is a provider of waste and recycling services.
Why Do We Think QRHC Will Underperform?
- Annual sales declines of 3.6% for the past two years show its products and services struggled to connect with the market during this cycle
- Eroding returns on capital from an already low base indicate that management’s recent investments are destroying value
- High net-debt-to-EBITDA ratio of 7× could force the company to raise capital at unfavorable terms if market conditions deteriorate
Quest Resource’s stock price of $1.96 implies a valuation ratio of 51x forward P/E. To fully understand why you should be careful with QRHC, check out our full research report (it’s free).
Ally Financial (ALLY)
Rolling One-Year Beta: 1.21
Born from the former GMAC (General Motors Acceptance Corporation) and rebranded in 2010, Ally Financial (NYSE: ALLY) operates a digital-first bank offering auto financing, insurance, mortgage lending, and investment services to consumers and commercial clients.
Why Do We Steer Clear of ALLY?
- Muted 1.7% annual revenue growth over the last two years shows its demand lagged behind its financials peers
- Muted 2.3% annual tangible book value per share growth over the last five years shows its capital generation lagged behind its financials peers
- Low tier one capital ratio of 9.8% indicates the company may struggle to maintain adequate liquidity during periods of economic stress
At $40.10 per share, Ally Financial trades at 7.8x forward P/E. If you’re considering ALLY for your portfolio, see our FREE research report to learn more.
Stocks We Like 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 6 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.
