1 Volatile Stock on Our Buy List and 2 to Be Wary Of
A highly volatile stock can deliver big gains - or just as easily wipe out a portfolio if things go south. While some investors embrace risk, mistakes can be costly for those who aren't prepared.
Navigating these stocks isn't easy, which is why StockStory helps you find Comfort In Chaos. That said, here is one volatile stock that could reward patient investors and two that could just as easily collapse.
Rolling One-Year Beta: 1.30
With access to millions of trucks, RXO (NYSE:RXO) offers full-truckload, less-than-truckload, and last-mile deliveries.
Why Are We Out on RXO?
6.2% annual revenue growth over the last two years was slower than its industrials peers
Earnings per share fell by 38.8% annually over the last four years while its revenue grew, showing its incremental sales were much less profitable
Unfavorable liquidity position could lead to additional equity financing that dilutes shareholders
At $16.09 per share, RXO trades at 56.9x forward P/E. Check out our free in-depth research report to learn more about why RXO doesn't pass our bar.
Rolling One-Year Beta: 1.52
Originally known as InterActiveCorp and built through Barry Diller's strategic acquisitions since the 1990s, IAC (NASDAQ:IAC) operates a portfolio of category-leading digital businesses including Dotdash Meredith, Angi, and Care.com, focusing on digital publishing, home services, and caregiving platforms.
Why Do We Avoid IAC?
Annual sales declines of 1.3% for the past five years show its products and services struggled to connect with the market during this cycle
Earnings per share have contracted by 51% annually over the last four years, a headwind for returns as stock prices often echo long-term EPS performance
Negative returns on capital show management lost money while trying to expand the business
IAC is trading at $36.50 per share, or 29.5x forward P/E. To fully understand why you should be careful with IAC, check out our full research report (it's free).
Rolling One-Year Beta: 1.51
Founded by Australian co-CEOs Mike Cannon-Brookes and Scott Farquhar in 2002, Atlassian (NASDAQ:TEAM) provides software as a service that makes it easier for large teams of software developers to manage projects, especially in software development.
Why Do We Love TEAM?
Average billings growth of 14.7% over the last year enhances its liquidity and shows there is steady demand for its products
User-friendly software enables clients to ramp up spending quickly, leading to the speedy recovery of customer acquisition costs
Impressive free cash flow profitability enables the company to fund new investments or reward investors with share buybacks/dividends
Atlassian's stock price of $197.15 implies a valuation ratio of 8.9x forward price-to-sales. Is now the time to initiate a position? See for yourself in our comprehensive research report, it's free.
The market surged in 2024 and reached record highs after Donald Trump's presidential victory in November, but questions about new economic policies are adding much uncertainty for 2025.
While the crowd speculates what might happen next, we're homing in on the companies that can succeed regardless of the political or macroeconomic environment. Put yourself in the driver's seat and build a durable portfolio by checking 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 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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Phillips 66: Cyclical Setback Or Structural Shift?
Phillips 66 (NYSE: PSX), headquartered in Houston, Texas, is a diversified energy manufacturing and logistics company with a strong presence in the refining, midstream, chemicals, and marketing sectors. Below are the quarterly earnings from each operational segment for the first quarter of 2025. Warning! GuruFocus has detected 8 Warning Sign with PSX. Phillips 66 stands as one of the leading independent refiners in the United States, with a crude oil processing capacity comparable to that of Valero Energy (NYSE:VLO) and Marathon Petroleum (NYSE:MPC), which I have previously analyzed. The renewable energy sector's contribution to Phillips 66's total revenue is currently a small but growing one, mirroring trends observed in other refiners, such as Valero Energy and Marathon Petroleum. This shift underscores the company's strategic commitment to sustainable energy, which complements its core operations in fossil fuels. While traditional refining remains the primary source of revenue, investments in renewable diesel and biofuels demonstrate a long-term commitment to diversification and the transition to cleaner energy, which is expected to yield long-term benefits. In 1Q25, Phillips 66's renewable segment posted a $185 million loss due to a shift in tax credit structures and softer international markets. While renewable fuel sales rose to approximately 63,000 barrels per day (bpd), margins were pressured. In contrast, Marathon Petroleum maintained stable performance through its Diamond Green Diesel JV, while Valero Energy led the sector with strong margins and high capacity. For more information about this particular segment, I strongly recommend reading my two preceding articles published on Gurufocus. The company's largest refining asset is the Sweeny Refinery in Texas, which has a crude oil processing capacity of approximately 265K barrels per calendar day (bpcd). Additionally, Phillips 66 holds a substantial interest in DCP Midstream LP and Phillips 66 Partners LP, which oversee a wide range of midstream assets, including those tailored to natural gas and natural gas liquids (NGL), as well as transportation, storage, and processing infrastructure. The PSX's total processed input worldwide for the quarter was 1,616K Bpcd in 1Q25, which is lower than that of Valero Energy and Marathon Petroleum. Note: Valero Energy is also producing ethanol. PSX's throughput declined due to planned refinery turnarounds and maintenance, which reduced refinery crude utilization from 94% in the preceding quarter to 80% in 1Q25. Note: Phillips 66 operates at a smaller overall capacity compared to Valero and Marathon Petroleum, which explains the lower total despite strong utilization. As I mentioned in my previous article on Marathon Petroleum, Chevron (CVX, Financial), Marathon Petroleum, Valero Energy (VLO, Financial), and Phillips 66 (PSX, Financial) are among the largest and most influential refiners in the United States. Each of them plays a significant role in the downstream oil and gas sector, particularly in refining crude oil into usable fuels and chemicals. As we can see, PSX is down nearly 6% year-over-year. Phillips 66, like other companies in the industry, operates in four distinct regions: the West Coast, the Central Corridor, the Gulf Coast, and the Atlantic Basin/European Union (EU). In 1Q25, the global refining margin was low at $6.81 per barrel (BBL), a decrease from $11.01 the previous year, representing a 38.1% year-over-year decline. Below, the different refining margins for each region are outlined. The Gulf Coast region has the highest refining margin in 1Q25. To compare, Valero Energy's worldwide refining margin was $9.78, while Marathon Petroleum's was $13.38, significantly higher than Phillips 66's. Phillips 66 reported mixed financial performance in the first quarter of 2025, delivering a net income of $487 million. The total revenue for the quarter was $31.73 billion, with an EBITDA of $1.67 billion. The net income was primarily impacted by scheduled maintenance activities at several refineries and decreased refining margins, particularly in the Gulf Coast and West Coast markets. However, the company's midstream and marketing segments partially offset these operational challenges with steady performance. In the first quarter of 2025, Phillips 66 encountered several challenges, including a substantial 38.1% year-over-year decline in refining margins. The company also initiated a significant spring turnaround program, which resulted in approximately $270 million in costs. In addition, crude capacity utilization dropped significantly to around 80%, down from 94% the previous year, while operating and interest expenses increased. These setbacks are similar to those faced by Marathon Petroleum and Valero Energy, which also struggled with weak margins, extensive maintenance, and operational downtime. This indicates a consistent trend among major refiners. In the first quarter of 2025, Phillips 66 reported a negative free cash flow of $236 million. This was due to $187 million in cash generated from operations being offset by $423 million in capital expenditures. The negative free cash flow in 1Q25 was an improvement compared to the negative free cash flow of $864 million recorded in 1Q24. The entire refining sector experienced disappointing results this quarter due to declining profit margins. Phillips 66 reported negative free cash flow this quarter, significantly underperforming compared to Valero, which achieved a positive cash flow of $703 million. Phillips 66 outperformed Marathon Petroleum, which reported a negative cash flow of $727 million this quarter, primarily due to an operational cash flow deficit of $64 million. The main challenges for Phillips 66 included high capital expenditures of $423 million, as well as weaker refining margins and operational inefficiencies noted by cash flow is essential for Phillips 66 as it supports key capital allocation priorities without incurring additional debt. A strong free cash flow helps reduce debt and maintain a healthy balance sheet. It also ensures that the company can consistently make dividend payments, providing shareholders with dependable returns. Phillips 66 declared and paid a quarterly dividend of $1.20 per share on June 2, yielding 3.85%. During the same period, the company repurchased approximately 1.996 million shares for $247 million, or $123.75 per share. The company's free cash flow enables its share repurchases, which enhances shareholder value and reflects confidence in its long-term performance. However, in 1Q25, negative free cash flow impeded these crucial activities, underscoring the necessity for margin recovery and strict cost discipline to restore financial flexibility and sustain capital returns. The net debt remains stable, with total debt at $18.803 billion and total cash amounting to $1.489 billion. The Debt-to-Equity ratio is 0.69 as of March 2025, which is a notable increase over the decade average of approximately company's debt levels are substantial and exceed industry standards. However, its strong cash flow and ability to manage debt, though lacking a large safety net, indicate that its financial flexibility remains intact. It is essential to monitor this situation closely, as a decline in oil margins or an increase in interest rates could lead to tighter coverage for the company. Investing in refiners like PSX carries significant risks, including volatile refining margins, regulatory pressures, and shifting demand due to the energy transition. Compared to Valero Energy and Marathon Petroleum, PSX incurs higher turnaround costs and reports weaker results in the first quarter, making its valuation less appealing. Valero has shown stronger recent performance, while Marathon enjoys better operational efficiency. Although all three companies are susceptible to cyclical downturns, PSX currently appears riskier due to its execution challenges and less favorable margin capture. Phillips 66's first-quarter results were disappointing. With a forward P/E over 17, the stock seems expensive given these cyclical challenges. While the long-term outlook remains solid, I'd prefer a better entry point, especially with ongoing margin pressures and turnaround costs. The technical analysis below will help identify a suitable entry point. Phillips 66's recent performance raises the question of whether it's facing a cyclical downturn or a deeper structural shift. Cyclically, refining margins and energy prices fluctuate, impacting earnings. However, a growing emphasis on renewable energy, regulatory pressures, and long-term demand changes suggest a possible structural transformation. The company's investments in biofuels and chemical diversification may indicate adaptation. Investors must weigh short-term volatility against long-term industry evolution to determine if Phillips 66 remains resilient or needs to fundamentally reinvent Phillips 66 is a strong option for long-term investors looking to gain exposure to the energy sector. Its attractive dividends and consistent cash flow contribute to its appeal. However, geopolitical risks, such as a potential conflict between Israel and Iran that could involve U.S. engagement, may disrupt oil supply and lead to rising oil prices. This situation could impact refining margins and overall market stability. While Phillips 66 is generally reliable, it, along with other refiners, operates in a volatile global environment that investors should monitor closely. Note: The chart has been adjusted to account for the dividend. PSX is currently trading within a descending channel pattern, with resistance at $126 and support at $111.80. The relative strength index (RSI) is at 68 and trending upward, suggesting that PSX is overbought and may have limited potential for further gains. If the stock experiences a breakout, potentially due to the situation in the Middle East, it could reach $134, although this is unlikely. However, given the tensions between Israel and Iran and possible U.S. involvement, anything is possible. A descending channel is typically considered a bearish continuation pattern, which can last until either a breakdown or a breakout takes place, usually following the initial trend established at the beginning of the channel (in this case, upward). For more details, please refer to the chart above. Adopting a Last-In, First-Out (LIFO) strategy for approximately 30%-40 % of your position, especially with a dividend yield of 3.85%. Ensure that you maintain an adequate cash balance. Set your target selling price between $125 and $127.50. Given the current level of market uncertainty, it is advisable to employ a LIFO (Last-In, First-Out) strategy for most of your investments. On the other hand, it may be wise to accumulate more shares in the range of $110 to $114, but proceed with caution, as PSX could drop to $102 or below if there is any unexpected decision regarding tariffs or a US attack on Iran. Note: It is essential to frequently update the TA chart to remain relevant, as we operate in an extremely volatile environment. This article first appeared on GuruFocus. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
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4 Things To Know About Warren Buffett's Investments in Tech
The Oracle of Omaha, Warren Buffett, is notorious for avoiding investments he doesn't fully understand. Over the years, he's skipped out on investing in tech stocks because of this. Not that this has kept him from building a substantial wealth — he's got an estimated net worth of $154 billion. See More: Read Next: But there's something to be said for embracing change. Over the years, Buffett's investing strategy has transformed in key ways. More recently, he's invested in certain tech and artificial intelligence (AI)-related stocks. Here's Buffett's specific investments that led to his foray into tech. According to Columbia Business School, Buffett's investing strategy has its roots (1941) in the Benjamin Graham school of value investing, which entails picking stocks that are priced lower than their intrinsic worth, based on company fundamentals like their earnings, assets, dividends and prospects. Trending Now: He bought his first stock when he was 11 years old for about $38 a share, per CNBC. It was in Cities Service Preferred, a natural gas company that no longer exists. Buffett's investments didn't stop with natural gas, but it wasn't until much later that he began investing in tech in 1959. When he was 29, he met Charlie Munger, the man who'd later become his business partner at Berkshire Hathaway, per From then on, his investments began to vary. Over the years, some major investing moves have included: Purchasing shares of Berkshire Hathaway for $8 apiece at age 32 (and beyond) Purchasing shares of American Express for $35 apiece at age 34 until he owned 5% of the company Investing $4 million in Walt Disney Corp at age 35 Since teaming up with Charlie Munger, he's also invested in a multitude of companies spanning real estate, media, insurance, railway services and more — to eventually include tech. The early 2010s is when Buffett began making significant moves in the tech space. Here's a timeline: In 2011, Buffett invested in IBM (Tech Services). He bought shares 14 additional times, sold shares six times and ultimately sold his entire stake by the start of 2018. Starting in 2012, Buffett began investing in VeriSign. As of 2024, he owned just over 13 million shares of the stock, according to MarketWatch. That's an estimated $2.7 billion. At the start of 2016, he began investing in Apple. His total shares are worth just over $67 billion. Apple stock makes up nearly a quarter of his entire portfolio, according to Nasdaq. Since the 2010s, Buffett has expanded his portfolio to include AI-related stocks. Here are some of the big ones: Domino's Pizza: Through Berkshire Hathaway, he owned roughly 1.3 million shares at the end of last year for a total estimated $550 million value, according to the Financial Post. Notably, Domino's is AI-adjacent as it uses AI in many ways, including through Microsoft's Azure platform, which helps with efficient and predictive ordering. Amazon: Berkshire Hathaway has sold Amazon shares over the past years, but the company still owns roughly 10 million shares worth just shy of $2 billion, per Stockcircle. They began purchasing shares around 2019. As tech continues to evolve, there's a good chance that Buffett will continue to invest in the industry — including companies that prominently use AI. More From GOBankingRates Mark Cuban Warns of 'Red Rural Recession' -- 4 States That Could Get Hit Hard 25 Places To Buy a Home If You Want It To Gain Value 7 Luxury SUVs That Will Become Affordable in 2025 This article originally appeared on 4 Things To Know About Warren Buffett's Investments in Tech Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
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Will SoFi Reach a New All-Time High Before the End of 2025?
SoFi's all-time high was about $27 per share, but this was during the 2021 SPAC bubble. More recently, SoFi peaked at $18.42 in January, after several years of largely being ignored by the market. If SoFi's business proves resilient in a challenging economic climate, it could certainly reach a new 52-week high. 10 stocks we like better than SoFi Technologies › SoFi (NASDAQ: SOFI) has been a strong performer for investors, with shares up by 135% over the past year, but the stock is still a long way from its all-time high. SoFi's all-time high came in 2021, shortly after it went public through a special purpose acquisition company, or SPAC. Shares peaked at about $27, but it's fair to say that this was mainly due to the speculative bubble that was going on, especially in SPACs, at the time. By virtually every metric, SoFi is a far stronger business today than it was back then. Since 2021, SoFi's membership base has more than tripled, the company's banking deposit base went from zero to more than $27 billion, and SoFi went from an adjusted net loss of $484 million in 2021 to an expected profit of at least $320 million in 2025. However, in the post-bubble world, SoFi's stock price reached a more recent high of $18.42 per share in January 2025, which is less than 30% above the current share price. Let's take a closer look at the momentum in SoFi's business, the catalysts that could take it to the next level, and whether SoFi could reach a new high later this year. As mentioned, SoFi has grown dramatically since becoming a public company, but it isn't exactly running out of gas just yet. In the first quarter of 2025, SoFi added more than 800,000 new members, its most in a single quarter ever. The company's members have 15.9 million products, 35% more than a year ago and a sequential acceleration in growth rate compared with the prior quarter. Not only is top-line growth impressive, but SoFi just finished its first full year of profitability, and on a GAAP basis, not adjusted. Margins are expected to grow rapidly for the next few years, with 2025's EPS expected to be about 83% higher year over year, according to the company's own guidance, which it has a strong history of beating. To be sure, there's a lot of growth potential throughout SoFi's business. For example, management has said that its goal is for SoFi to be a "top 10" financial institution, and it would need to more than 10X the size of its banking business to earn a spot on the list. But there are some catalysts that could be especially big growth drivers over the next few years. One example is the company's lending platform. Of course, SoFi began its life as a lender, but it has just recently started to branch out in ways that don't involve it making loans directly to borrowers. SoFi has been rapidly scaling its loan platform business (LPB), which originates loans on behalf of third-party banks or refers customers to other lenders if they don't meet SoFi's criteria. This is a rapidly growing capital-light stream of fee income. There's a huge opportunity to grow the loan platform, especially when we look beyond the bank's traditional core lending products of personal loans and student loans. Specifically, SoFi's home loan business, which has more than quintupled in size since 2023 (but still remains small), is worth watching. There's a ton of pent-up demand for both purchase loans and cash-out refinancing, with Americans currently sitting on a record high $35 trillion in home equity. First, while I think it can (and will) get there eventually, I don't think there's a high probability of SoFi surpassing its 2021 peak by the end of this year. That level was fueled by a speculative bubble in blank-check companies, and it was at a time when interest rates were at near-zero levels, which was a generally strong catalyst for stock valuations. SoFi would need to rise by about 90% to overtake its all-time high, and that would be a stretch to happen over the next six months or so. On the other hand, it wouldn't take that much to catapult SoFi past its $18.42 peak earlier this year, which would imply about 27% upside. In a nutshell, if SoFi posts strong results in its next two quarterly reports, tariff uncertainty starts to fade, and consumer confidence rises in the latter half of the year, I believe there's a good chance we'll see a new 2025 high. If the Federal Reserve ends up cutting interest rates at least a couple of times, it would be helpful as well. Having said that, SoFi is a business with tremendous momentum and massive growth potential. Regardless of what happens for the rest of 2025, SoFi's future looks bright, and it's one of the largest financial sector holdings in my own stock portfolio. Before you buy stock in SoFi Technologies, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and SoFi Technologies wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $659,171!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $891,722!* Now, it's worth noting Stock Advisor's total average return is 995% — a market-crushing outperformance compared to 172% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of June 9, 2025 Matt Frankel has positions in SoFi Technologies. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Will SoFi Reach a New All-Time High Before the End of 2025? was originally published by The Motley Fool Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
