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 avoid and some better opportunities instead.
Campbell's (CPB)
Rolling One-Year Beta: 0.11
With its iconic canned soup as its cornerstone product, Campbell's (NASDAQ: CPB) is a packaged food company with an illustrious portfolio of brands.
Why Are We Cautious About CPB?
- Falling unit sales over the past two years show it’s struggled to move its products and had to rely on price increases
- Estimated sales growth of 1.3% for the next 12 months implies demand will slow from its three-year trend
- Efficiency has decreased over the last year as its operating margin fell by 2.9 percentage points
Campbell’s stock price of $34.40 implies a valuation ratio of 10.7x forward P/E. Check out our free in-depth research report to learn more about why CPB doesn’t pass our bar.
Playa Hotels & Resorts (PLYA)
Rolling One-Year Beta: 0.48
Sporting a roster of beachfront properties, Playa Hotels & Resorts (NASDAQ: PLYA) is an owner, operator, and developer of all-inclusive resorts in prime vacation destinations.
Why Are We Hesitant About PLYA?
- Revenue per room has underperformed over the past two years, suggesting it may need to develop new facilities
- Projected sales decline of 2.6% for the next 12 months points to an even tougher demand environment ahead
- Underwhelming 4.4% return on capital reflects management’s difficulties in finding profitable growth opportunities
At $13.43 per share, Playa Hotels & Resorts trades at 21.7x forward P/E. To fully understand why you should be careful with PLYA, check out our full research report (it’s free).
Global Industrial (GIC)
Rolling One-Year Beta: 0.90
Formerly known as Systemax, Global Industrial (NYSE: GIC) distributes industrial and commercial products to businesses and institutions.
Why Do We Avoid GIC?
- Muted 5.7% annual revenue growth over the last four years shows its demand lagged behind its industrials peers
- Earnings per share fell by 6.8% annually over the last two years while its revenue grew, showing its incremental sales were much less profitable
- Diminishing returns on capital suggest its earlier profit pools are drying up
Global Industrial is trading at $26.48 per share, or 16.6x forward P/E. Dive into our free research report to see why there are better opportunities than GIC.
Stocks We Like More
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 9 Market-Beating Stocks. This is a curated list of our High Quality stocks that have generated a market-beating return of 176% over the last five years.
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-small-cap company Exlservice (+354% five-year return). Find your next big winner with StockStory today for free.
