Stability is great, but low-volatility stocks may struggle to deliver market-beating returns over time as they sometimes underperform during bull markets.

Luckily for you, StockStory helps you navigate which companies are truly worth holding. That said, here are three low-volatility stocks to avoid and some better opportunities instead.

Calavo (CVGW)

Rolling One-Year Beta: 0.64

A trailblazer in the avocado industry, Calavo Growers (NASDAQ: CVGW) is a pioneering California-based provider of high-quality avocados and other fresh food products.

Why Do We Steer Clear of CVGW?

1. Products aren't resonating with the market as its revenue declined by 17.2% annually over the last three years
2. Subscale operations are evident in its revenue base of $693.7 million, meaning it has fewer distribution channels than its larger rivals
3. Gross margin of 10.1% is an output of its commoditized products

At $20.67 per share, Calavo trades at 11.8x forward P/E. Check out our free in-depth research report to learn more about why CVGW doesn’t pass our bar.

A. O. Smith (AOS)

Rolling One-Year Beta: 0.75

Credited with the invention of the glass-lined water heater, A.O. Smith (NYSE: AOS) manufactures water heating and treatment products for various industries.

Why Do We Think Twice About AOS?

1. Organic revenue growth fell short of our benchmarks over the past two years and implies it may need to improve its products, pricing, or go-to-market strategy
2. Estimated sales growth of 2.9% for the next 12 months is soft and implies weaker demand
3. Earnings growth underperformed the sector average over the last two years as its EPS grew by just 1.3% annually

A. O. Smith’s stock price of $68.03 implies a valuation ratio of 16.8x forward P/E. To fully understand why you should be careful with AOS, check out our full research report (it’s free for active Edge members).

Donaldson (DCI)

Rolling One-Year Beta: 0.84

Playing a vital role in the historic Apollo 11 mission, Donaldson (NYSE: DCI) manufacturers and sells filtration equipment for various industries.

Why Does DCI Worry Us?

1. Muted 4.2% annual revenue growth over the last two years shows its demand lagged behind its industrials peers
2. Core business is underperforming as its organic revenue has disappointed over the past two years, suggesting it might need acquisitions to stimulate growth
3. Estimated sales growth of 3.6% for the next 12 months is soft and implies weaker demand

Donaldson is trading at $92.40 per share, or 19.6x forward EV-to-EBITDA. Read our free research report to see why you should think twice about including DCI in your portfolio.

Stocks We Like More

The market’s up big this year - but there’s a catch. Just 4 stocks account for half the S&P 500’s entire gain. That kind of concentration makes investors nervous, and for good reason. While everyone piles into the same crowded names, smart investors are hunting quality where no one’s looking - and paying a fraction of the price. Check out the high-quality names we’ve flagged in 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 244% over the last five years (as of June 30, 2025).

Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,326% between June 2020 and June 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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