Low-volatility stocks may offer stability, but that often comes at the cost of slower growth and the upside potential of more dynamic companies.
Luckily for you, StockStory helps you navigate which companies are truly worth holding. Keeping that in mind, here is one low-volatility stock that could succeed under all market conditions and two stuck in limbo.
Two Stocks to Sell:
First Watch (FWRG)
Rolling One-Year Beta: 0.73
Based on a nautical reference to the first work shift aboard a ship, First Watch (NASDAQ: FWRG) is a chain of breakfast and brunch restaurants whose menu is heavily-focused on eggs and griddle items such as pancakes.
Why Are We Wary of FWRG?
- Ability to fund investments or reward shareholders with increased buybacks or dividends is restricted by its weak free cash flow margin of -0.5% for the last two years
- ROIC of 2.1% reflects management’s challenges in identifying attractive investment opportunities
- Depletion of cash reserves could lead to a fundraising event that triggers shareholder dilution
At $19.54 per share, First Watch trades at 48.6x forward price-to-earnings. Read our free research report to see why you should think twice about including FWRG in your portfolio.
Biogen (BIIB)
Rolling One-Year Beta: 0.57
Founded in 1978 and pioneering treatments for some of medicine's most complex challenges, Biogen (NASDAQ: BIIB) develops and markets therapies for neurological conditions, including multiple sclerosis, Alzheimer's disease, spinal muscular atrophy, and rare diseases.
Why Should You Sell BIIB?
- Sales tumbled by 7.6% annually over the last five years, showing market trends are working against its favor during this cycle
- Performance over the past five years shows each sale was less profitable as its earnings per share dropped by 13.3% annually, worse than its revenue
- Waning returns on capital imply its previous profit engines are losing steam
Biogen’s stock price of $118.15 implies a valuation ratio of 7.3x forward price-to-earnings. To fully understand why you should be careful with BIIB, check out our full research report (it’s free).
One Stock to Watch:
agilon health (AGL)
Rolling One-Year Beta: -0.04
Transforming how doctors care for seniors by shifting financial incentives from volume to outcomes, agilon health (NYSE: AGL) provides a platform that helps primary care physicians transition to value-based care models for Medicare patients through long-term partnerships and global capitation arrangements.
Why Do We Like AGL?
- Annual revenue growth of 51.7% over the past two years was outstanding, reflecting market share gains this cycle
- Customer growth averaged 41.2% over the past two years, showing its ability to "land" new contracts and potentially "expand" them later - a powerful one-two punch for sales
- Cash-burning tendencies have improved over the last five years, showing it could become financially independent one day
agilon health is trading at $4.01 per share, or 0.3x forward price-to-sales. Is now the right time to buy? Find out in our full research report, it’s free.
Stocks We Like Even 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 Axon (+711% five-year return). Find your next big winner with StockStory today for free.
