Low-volatility stocks may offer stability, but that often comes at the cost of slower growth and the upside potential of more dynamic companies.
Choosing the wrong investments can cause you to fall behind, which is why we started StockStory - to separate the winners from the losers. That said, here are three low-volatility stocks to steer clear of and a few better alternatives.
Crocs (CROX)
Rolling One-Year Beta: 0.46
Founded in 2002, Crocs (NASDAQ:CROX) sells casual footwear and is known for its iconic clog shoe.
Why Are We Wary of CROX?
- Weak constant currency growth over the past two years indicates challenges in maintaining its market share
- Forecasted revenue decline of 2.6% for the upcoming 12 months implies demand will fall off a cliff
- Diminishing returns on capital suggest its earlier profit pools are drying up
Crocs is trading at $77.88 per share, or 6.8x forward P/E. Check out our free in-depth research report to learn more about why CROX doesn’t pass our bar.
Huntington Ingalls (HII)
Rolling One-Year Beta: 0.87
Building Nimitz-class aircraft carriers used in active service, Huntington Ingalls (NYSE:HII) develops marine vessels and their mission systems and maintenance services.
Why Should You Sell HII?
- Backlog growth averaged a weak 4.9% over the past two years, suggesting it may need to tweak its product roadmap or go-to-market strategy
- Earnings per share fell by 1.1% annually over the last five years while its revenue grew, showing its incremental sales were much less profitable
- Diminishing returns on capital from an already low starting point show that neither management’s prior nor current bets are going as planned
At $307.44 per share, Huntington Ingalls trades at 19x forward P/E. Dive into our free research report to see why there are better opportunities than HII.
Selective Insurance Group (SIGI)
Rolling One-Year Beta: 0.30
Founded in 1926 during the early days of automobile insurance, Selective Insurance Group (NASDAQ:SIGI) is a property and casualty insurance company that sells commercial, personal, and excess and surplus lines insurance products through independent agents.
Why Do We Steer Clear of SIGI?
- Customers postponed purchases of its products and services this cycle as its revenue declined by 10.4% annually over the last five years
- Sales are expected to decline once again over the next 12 months as it continues working through a challenging demand environment
- Earnings per share lagged its peers over the last two years as they only grew by 9.2% annually
Selective Insurance Group’s stock price of $77.90 implies a valuation ratio of 1.4x forward P/B. To fully understand why you should be careful with SIGI, check out our full research report (it’s free for active Edge members).
High-Quality Stocks for All Market Conditions
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Don’t let fear keep you from great opportunities and take a look at 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).
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