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 is one low-volatility stock that could succeed under all market conditions and two that may not keep up.
Two Stocks to Sell:
Burlington (BURL)
Rolling One-Year Beta: 0.93
Founded in 1972 as a discount coat and outerwear retailer, Burlington Stores (NYSE: BURL) is now an off-price retailer that has broadened into general apparel, footwear, and home goods.
Why Are We Hesitant About BURL?
- Annual sales growth of 8% over the last six years lagged behind its consumer retail peers as its large revenue base made it difficult to generate incremental demand
- Free cash flow margin shrank by 6.5 percentage points over the last year, suggesting the company is consuming more capital to stay competitive
- Below-average returns on capital indicate management struggled to find compelling investment opportunities
Burlington is trading at $262.37 per share, or 26.8x forward P/E. If you’re considering BURL for your portfolio, see our FREE research report to learn more.
Lamb Weston (LW)
Rolling One-Year Beta: 0.36
Best known for its Grown in Idaho brand, Lamb Weston (NYSE: LW) produces and distributes potato products such as frozen french fries and mashed potatoes.
Why Does LW Fall Short?
- Sales are projected to remain flat over the next 12 months as demand decelerates from its three-year trend
- Easily substituted products (and therefore stiff competition) result in an inferior gross margin of 23.9% that must be offset through higher volumes
- Efficiency has decreased over the last year as its operating margin fell by 5.3 percentage points
At $63.50 per share, Lamb Weston trades at 20.8x forward P/E. Dive into our free research report to see why there are better opportunities than LW.
One Stock to Buy:
EXL (EXLS)
Rolling One-Year Beta: 0.79
Originally founded as an outsourcing company in 1999 before evolving into a technology-focused enterprise, EXL (NASDAQ: EXLS) provides data analytics and AI-powered digital operations solutions that help businesses transform their operations and make better decisions.
Why Should You Buy EXLS?
- Market share has increased this cycle as its 15.1% annual revenue growth over the last five years was exceptional
- Share repurchases over the last five years enabled its annual earnings per share growth of 27% to outpace its revenue gains
- Robust free cash flow margin of 11.5% gives it many options for capital deployment
EXL’s stock price of $43 implies a valuation ratio of 21.5x forward P/E. Is now the time to initiate a position? Find out in 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.
The smart money is already positioning for the next leg up. Don’t miss out on the recovery - check out 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 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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