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. That said, here are three low-volatility stocks to steer clear of and a few better alternatives.

CarMax (KMX)

Rolling One-Year Beta: 0.47

Known for its transparent, customer-centric approach and wide selection of vehicles, Carmax (NYSE: KMX) is the largest automotive retailer in the United States.

Why Should You Sell KMX?

1. Poor same-store sales performance over the past two years indicates it’s having trouble bringing new shoppers into its brick-and-mortar locations
2. Widely-available products (and therefore stiff competition) result in an inferior gross margin of 10.9% that must be offset through higher volumes
3. High net-debt-to-EBITDA ratio of 16× could force the company to raise capital at unfavorable terms if market conditions deteriorate

CarMax’s stock price of $44.24 implies a valuation ratio of 12.6x forward P/E. Check out our free in-depth research report to learn more about why KMX doesn’t pass our bar.

News Corp (NWSA)

Rolling One-Year Beta: 0.78

Established in 2013 after a restructuring, News Corp (NASDAQ: NWSA) is a multinational conglomerate known for its news publishing, broadcasting, digital media, and book publishing.

Why Is NWSA Risky?

1. Products and services have few die-hard fans as sales have declined by 1.3% annually over the last five years
2. Demand will likely be soft over the next 12 months as Wall Street’s estimates imply tepid growth of 2.5%
3. Low returns on capital reflect management’s struggle to allocate funds effectively, and its decreasing returns suggest its historical profit centers are aging

At $26.64 per share, News Corp trades at 28x forward P/E. To fully understand why you should be careful with NWSA, check out our full research report (it’s free for active Edge members).

Aflac (AFL)

Rolling One-Year Beta: 0.61

Known for its iconic duck mascot that has quacked "Aflac!" in commercials since 2000, Aflac (NYSE: AFL) provides supplemental health and life insurance policies that pay cash benefits directly to policyholders for expenses not covered by their primary insurance.

Why Do We Pass on AFL?

1. Insurance offerings face significant market challenges this cycle as net premiums earned contracted by 7.8% annually over the last four years
2. Pre-tax profit margin declined by 9.7 percentage points over the last two years as its sales cratered
3. Estimated book value per share growth of 4.6% for the next 12 months implies profitability will slow from its two-year trend

Aflac is trading at $111.75 per share, or 2.1x forward P/B. Check out our free in-depth research report to learn more about why AFL doesn’t pass our bar.

Stocks We Like More

Trump’s April 2025 tariff bombshell triggered a massive market selloff, but stocks have since staged an impressive recovery, leaving those who panic sold on the sidelines.

Take advantage of the rebound by checking out our Top 6 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).

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 Tecnoglass (+1,754% 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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