Franchise Group (FRG)

Looking to crush your class stock market game and take home the win? If you’re hunting for a top stock to give you the edge, Franchise Group might be your secret weapon. Sure, this company didn’t pull off the big splash it wanted when its bid to buy Kohl’s fell through, but don’t sleep on it just yet—Franchise Group has a lot going for it that could make it the top stock you need to outshine your classmates.

Here’s the deal: Franchise Group owns a mix of well-known chains like Vitamin Shoppe, Pet Supplies Plus, and discount home-furnishing stores like American Freight. That’s a diverse lineup, and if you’re serious about winning the stock market game, you’ll want to know that a diversified company can help spread your risk. It’s like stacking your team with players that can perform in different situations, so even when one category struggles, another picks up the slack. But let’s talk strategy—because if you’re aiming to win, you’re probably thinking about going for a high-risk, high-reward move. This is where momentum trading comes into play.

“To win in short-term trading or competitions like a stock market game, you often need to ride the wave of stocks that are moving up fast, even if they carry more risk,” says analyst Brian Kahn. In other words, stocks like Franchise Group, which has been on a rollercoaster this year, could be perfect for this. Their shares are down 34% year-to-date, which might scare off some people, but not you. If you’re playing the game to win, this drop could signal a big comeback opportunity if you time it right.

What’s more, Franchise Group isn’t just about home furnishings—though that’s a big part of their business. They also own Pet Supplies Plus and Sylvan Learning, both of which are in markets that hold steady even when the economy slows down. People are still going to spend on their pets and their kids’ education. “Health, pets, and education are recession-proof markets, and Franchise Group’s brands are strong players in these spaces,” says Oppenheimer analyst Ian Zaffino. If you’re banking on a high-risk strategy in your game, this is the kind of stock that could pay off in a big way if these segments continue to perform.

Now, here’s where things get really interesting for those who want to win their stock market game: Franchise Group has a ton of potential to turn even more of its stores into franchises. Right now, only about 40% of its stores are franchised, but the company believes they could convert up to 90% of them. And when you’re talking about top-notch names like Vitamin Shoppe (the No. 2 wellness brand) and Pet Supplies Plus (the third-largest pet-care retailer), you’re looking at some serious franchise opportunities.

“Franchising is a money-making machine for companies once they hit their stride,” says Zaffino. “It’s low risk for them and generates recurring revenue through royalties.” This could mean a free cash flow-rich company, which means more dividends in the future. And dividends matter, especially if you’re trying to maximize your portfolio’s returns in the game.

So, how do you win your stock market game with a stock like Franchise Group? You play it smart. Franchise Group’s current price makes it a bargain—it’s trading at less than 9 times expected forward earnings before interest, taxes, depreciation, and amortization (EBITDA). Compare that to Driven Brands Holdings, another franchise-heavy company that trades at nearly 16 times earnings. Buying low on a company like Franchise Group now could pay off big time, especially if you’re aiming to capitalize on the stock’s momentum.

Of course, a high-risk, high-reward strategy is all about timing. While short-term trading, like in a stock market game, can be exciting, it’s not the same as long-term investing. In the real world, you’ll want to balance risk with stability by diversifying your investments across a portfolio. That’s where something like an S&P 500 index fund comes in. An S&P 500 index fund gives you exposure to 500 of the biggest companies in the U.S., spreading out your risk across industries, unlike focusing on a single stock.

For now, if your goal is to win the stock market game, Franchise Group could be a top stock to buy. With its mix of brands in resilient markets and its potential for big gains through franchising, you’ve got the chance to take a calculated risk that could bring serious rewards. But remember, short-term wins are fun, and the thrill of riding momentum is real, but for long-term success, you’ll need to think more about a diversified portfolio. For now, though, you’re playing to win—so take the shot.