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. That said, here are three low-volatility stocks to avoid and some better opportunities instead.
E.W. Scripps (SSP)
Rolling One-Year Beta: -0.02
Founded as a chain of daily newspapers, E.W. Scripps (NASDAQ: SSP) is a diversified media enterprise operating a range of local television stations, national networks, and digital media platforms.
Why Do We Steer Clear of SSP?
- Flat sales over the last two years suggest it must innovate and find new ways to grow
- ROIC of 3.5% reflects management’s challenges in identifying attractive investment opportunities, and its falling returns suggest its earlier profit pools are drying up
- Waning returns on capital from an already weak starting point displays the inefficacy of management’s past and current investment decisions
At $2.27 per share, E.W. Scripps trades at 0.6x forward EV-to-EBITDA. If you’re considering SSP for your portfolio, see our FREE research report to learn more.
AMETEK (AME)
Rolling One-Year Beta: 0.90
Started from its humble beginnings in motor repair, AMETEK (NYSE: AME) manufactures electronic devices used in industries like aerospace, power, and healthcare.
Why Is AME Not Exciting?
- Sales trends were unexciting over the last two years as its 4.3% annual growth was below the typical industrials company
- Organic sales performance over the past two years indicates the company may need to make strategic adjustments or rely on M&A to catalyze faster growth
AMETEK’s stock price of $182.98 implies a valuation ratio of 24.1x forward P/E. Read our free research report to see why you should think twice about including AME in your portfolio.
Alamo (ALG)
Rolling One-Year Beta: 0.68
Expanding its markets through acquisitions since its founding, Alamo (NSYE:ALG) designs, manufactures, and services vegetation management and infrastructure maintenance equipment for governmental, industrial, and agricultural use.
Why Does ALG Fall Short?
- Sales stagnated over the last two years and signal the need for new growth strategies
- Gross margin of 25.6% is below its competitors, leaving less money to invest in areas like marketing and R&D
- Earnings per share have contracted by 2.1% annually over the last two years, a headwind for returns as stock prices often echo long-term EPS performance
Alamo is trading at $182.42 per share, or 15.8x forward P/E. To fully understand why you should be careful with ALG, check out our full research report (it’s free for active Edge members).
High-Quality Stocks for All Market Conditions
Donald Trump’s April 2025 "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.
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