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. Keeping that in mind, here are two volatile stocks with massive upside potential and one best left to the gamblers.
One Stock to Sell:
Veritex Holdings (VBTX)
Rolling One-Year Beta: 1.23
Founded during the 2009 financial crisis when many banks were failing, Veritex Holdings (NASDAQGM:VBTX) operates Veritex Community Bank, providing commercial and retail banking services to small and medium-sized businesses and professionals in Texas.
Why Does VBTX Fall Short?
- Products and services are facing significant end-market challenges during this cycle as sales have declined by 1.1% annually over the last two years
- Estimated net interest income growth of 2.6% for the next 12 months implies demand will slow from its four-year trend
- Performance over the past two years shows each sale was less profitable as its earnings per share dropped by 12.8% annually, worse than its revenue
At $33.52 per share, Veritex Holdings trades at 1.1x forward P/B. Check out our free in-depth research report to learn more about why VBTX doesn’t pass our bar.
Two Stocks to Watch:
Distribution Solutions (DSGR)
Rolling One-Year Beta: 1.27
Founded in 1952, Distribution Solutions (NASDAQ: DSGR) provides supply chain solutions and distributes industrial, safety, and maintenance products to various industries.
Why Are We Fans of DSGR?
- Annual revenue growth of 17.3% over the last two years was superb and indicates its market share increased during this cycle
- Strong unit economics and 33.7% gross margin provide ample funds for marketing and new product development
- Earnings per share have massively outperformed its peers over the last two years, increasing by 22.6% annually
Distribution Solutions is trading at $33.24 per share, or 22.9x forward P/E. Is now the time to initiate a position? Find out in our full research report, it’s free.
Frost Bank (CFR)
Rolling One-Year Beta: 1.23
Tracing its roots back to 1868 when it was founded during Texas's post-Civil War reconstruction era, Cullen/Frost Bankers (NYSE: CFR) operates Frost Bank, a Texas-based financial institution providing commercial and consumer banking, wealth management, and insurance services.
Why Is CFR Interesting?
- Market share has increased this cycle as its 12.1% annual net interest income growth over the last five years was exceptional
- Net interest margin expanded by 30 basis points (100 basis points = 1 percentage point) over the last two years, providing additional flexibility for investments
- Annual tangible book value per share growth of 25% over the past two years was outstanding, reflecting strong capital accumulation this cycle
Frost Bank’s stock price of $130.90 implies a valuation ratio of 2x forward P/B. Is now the right time to buy? See for yourself in our comprehensive research report, it’s free.
Stocks We Like Even More
Trump’s April 2025 tariff bombshell triggered a massive market selloff, but stocks have since staged an impressive recovery, leaving those who panic sold on the sidelines.
Take advantage of the rebound by checking out our Top 9 Market-Beating Stocks. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025).
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-micro-cap company Kadant (+351% 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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