Stability is great, but low-volatility stocks may struggle to deliver market-beating returns over time as they sometimes underperform during bull markets.
Finding the right balance between safety and returns isn’t easy, which is why StockStory is here to help. Keeping that in mind, here are three low-volatility stocks that don’t make the cut and some better opportunities instead.
Under Armour (UAA)
Rolling One-Year Beta: 0.77
Founded in 1996 by a former University of Maryland football player, Under Armour (NYSE: UAA) is an apparel brand specializing in sportswear designed to improve athletic performance.
Why Do We Avoid UAA?
- Underwhelming constant currency revenue performance over the past two years suggests its product offering at current prices doesn’t resonate with customers
- Forecasted revenue decline of 3.3% for the upcoming 12 months implies demand will fall even further
- Low returns on capital reflect management’s struggle to allocate funds effectively
Under Armour’s stock price of $5.71 implies a valuation ratio of 17.8x forward price-to-earnings. Read our free research report to see why you should think twice about including UAA in your portfolio.
Teledyne (TDY)
Rolling One-Year Beta: 0.89
Playing a role in mapping the ocean floor as we know it today, Teledyne (NYSE: TDY) offers digital imaging and instrumentation products for various industries.
Why Are We Cautious About TDY?
- Core business is underperforming as its organic revenue has disappointed over the past two years, suggesting it might need acquisitions to stimulate growth
- Below-average returns on capital indicate management struggled to find compelling investment opportunities, and its decreasing returns suggest its historical profit centers are aging
- Waning returns on capital from an already weak starting point displays the inefficacy of management’s past and current investment decisions
Teledyne is trading at $458.10 per share, or 20.7x forward price-to-earnings. Dive into our free research report to see why there are better opportunities than TDY.
QuidelOrtho (QDEL)
Rolling One-Year Beta: 0.23
Born from the 2022 merger of Quidel and Ortho Clinical Diagnostics, QuidelOrtho (NASDAQ: QDEL) develops and manufactures diagnostic testing solutions for healthcare providers, from rapid point-of-care tests to complex laboratory instruments and systems.
Why Do We Steer Clear of QDEL?
- Constant currency growth was below our standards over the past two years, suggesting it might need to invest in product improvements to get back on track
- 20.5 percentage point decline in its free cash flow margin over the last five years reflects the company’s increased investments to defend its market position
- Waning returns on capital imply its previous profit engines are losing steam
At $28.63 per share, QuidelOrtho trades at 11.8x forward price-to-earnings. Read our free research report to see why you should think twice about including QDEL in your portfolio.
Stocks We Like More
Donald Trump’s victory in the 2024 U.S. Presidential Election sent major indices to all-time highs, but stocks have retraced as investors debate the health of the economy and the potential impact of tariffs.
While this leaves much uncertainty around 2025, a few companies are poised for long-term gains regardless of the political or macroeconomic climate, like 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 175% over the last five years.
Stocks that made our list in 2019 include now familiar names such as Nvidia (+2,183% between December 2019 and December 2024) as well as under-the-radar businesses like Comfort Systems (+751% five-year return). Find your next big winner with StockStory today for free.
