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3 Volatile Stocks We Approach with Caution

BOOT Cover Image

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.

These stocks can be a rollercoaster, and StockStory is here to guide you through the ups and downs. That said, here are three volatile stocks to steer clear of and a few better alternatives.

Boot Barn (BOOT)

Rolling One-Year Beta: 1.79

With a strong store presence in Texas, California, Florida, and Oklahoma, Boot Barn (NYSE: BOOT) is a western-inspired apparel and footwear retailer.

Why Does BOOT Give Us Pause?

  1. Lagging same-store sales over the past two years suggest it might have to change its pricing and marketing strategy to stimulate demand
  2. Smaller revenue base of $1.99 billion means it hasn’t achieved the economies of scale that some industry juggernauts enjoy
  3. Free cash flow margin shrank by 3.9 percentage points over the last year, suggesting the company is consuming more capital to stay competitive

Boot Barn’s stock price of $189.79 implies a valuation ratio of 28.5x forward P/E. Dive into our free research report to see why there are better opportunities than BOOT.

Insteel (IIIN)

Rolling One-Year Beta: 1.38

Growing from a small wire manufacturer to one of the largest in the U.S., Insteel (NYSE: IIIN) provides steel wire reinforcing products for concrete.

Why Are We Hesitant About IIIN?

  1. Sales were flat over the last two years, indicating it’s failed to expand this cycle
  2. Free cash flow margin dropped by 5.9 percentage points over the last five years, implying the company became more capital intensive as competition picked up
  3. Diminishing returns on capital suggest its earlier profit pools are drying up

At $31.28 per share, Insteel trades at 10.6x forward P/E. Check out our free in-depth research report to learn more about why IIIN doesn’t pass our bar.

CoreCivic (CXW)

Rolling One-Year Beta: 1.58

Originally founded in 1983 as the first private prison company in the United States, CoreCivic (NYSE: CXW) operates correctional facilities, detention centers, and residential reentry programs for government agencies across the United States.

Why Are We Wary of CXW?

  1. Sales were flat over the last five years, indicating it’s failed to expand this cycle
  2. Sluggish trends in its average available beds suggest customers aren’t adopting its solutions as quickly as the company hoped
  3. Below-average returns on capital indicate management struggled to find compelling investment opportunities

CoreCivic is trading at $18.37 per share, or 14.1x forward P/E. Read our free research report to see why you should think twice about including CXW in your portfolio.

High-Quality Stocks for All Market Conditions

When Trump unveiled his aggressive tariff plan in April 2025, markets tanked as investors feared a full-blown trade war. But those who panicked and sold missed the subsequent rebound that’s already erased most losses.

Don’t let fear keep you from great opportunities and take a look at Top 6 Stocks for this week. 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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