Stability is great, but low-volatility stocks may struggle to deliver market-beating returns over time as they sometimes underperform during bull markets.
Choosing the wrong investments can cause you to fall behind, which is why we started StockStory - to separate the winners from the losers. Keeping that in mind, here are three low-volatility stocks to avoid and some better opportunities instead.
WideOpenWest (WOW)
Rolling One-Year Beta: 0.65
Initially started in Denver as a cable television provider, WideOpenWest (NYSE:WOW) provides high-speed internet, cable, and telephone services to the Midwest and Southeast regions of the U.S.
Why Do We Avoid WOW?
- Demand for its offerings was relatively low as its number of subscribers has underwhelmed
- Cash burn makes us question whether it can achieve sustainable long-term growth
- Diminishing returns on capital from an already low starting point show that neither management’s prior nor current bets are going as planned
WideOpenWest is trading at $3.41 per share, or 1x forward EV-to-EBITDA. If you’re considering WOW for your portfolio, see our FREE research report to learn more.
Bristol-Myers Squibb (BMY)
Rolling One-Year Beta: 0.07
With roots dating back to 1887 and a transformative merger in 1989 that gave the company its current name, Bristol-Myers Squibb (NYSE:BMY) discovers, develops, and markets prescription medications for serious diseases including cancer, blood disorders, immunological conditions, and cardiovascular diseases.
Why Are We Wary of BMY?
- Large revenue base makes it harder to increase sales quickly, and its annual revenue growth of 1.9% over the last two years was below our standards for the healthcare sector
- Sales are projected to tank by 4.4% over the next 12 months as demand evaporates
- Shrinking returns on capital from an already weak position reveal that neither previous nor ongoing investments are yielding the desired results
Bristol-Myers Squibb’s stock price of $46.98 implies a valuation ratio of 7.1x forward P/E. Dive into our free research report to see why there are better opportunities than BMY.
Selective Insurance Group (SIGI)
Rolling One-Year Beta: 0.44
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 Is SIGI Not Exciting?
- Estimated sales decline of 60.9% for the next 12 months implies a challenging demand environment
- Operational productivity has decreased over the last four years as its combined ratio worsened by 6.6 percentage points
- Performance over the past two years shows its incremental sales were less profitable, as its 11.7% annual earnings per share growth trailed its revenue gains
At $81.02 per share, Selective Insurance Group trades at 1.5x forward P/B. Check out our free in-depth research report to learn more about why SIGI doesn’t pass our bar.
Stocks We Like More
Donald Trump’s April 2024 "Liberation Day" tariffs sent markets into a tailspin, but stocks have since rebounded strongly, proving that knee-jerk reactions often create the best buying opportunities.
The smart money is already positioning for the next leg up. Don’t miss out on the recovery - check 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 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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