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 is one low-volatility stock providing safe-and-steady growth and two that may not deliver the returns you need.
Two Consumer DiscretionaryStocks to Sell:
Charter (CHTR)
Rolling One-Year Beta: 0.73
Operating as Spectrum, Charter (NASDAQ: CHTR) is a leading telecommunications company offering cable television, high-speed internet, and voice services across the United States.
Why Do We Think Twice About CHTR?
- Number of internet subscribers has disappointed over the past two years, indicating weak demand for its offerings
- Demand will likely be weak over the next 12 months as Wall Street expects flat revenue
- ROIC of 9.6% reflects management’s challenges in identifying attractive investment opportunities
Charter is trading at $391.09 per share, or 10.2x forward P/E. Read our free research report to see why you should think twice about including CHTR in your portfolio.
Somnigroup (SGI)
Rolling One-Year Beta: 0.88
Established through the merger of Tempur-Pedic and Sealy in 2012, Somnigroup (NYSE: SGI) is a bedding manufacturer known for its innovative memory foam mattresses and sleep products
Why Does SGI Fall Short?
- Lackluster 4.6% annual revenue growth over the last two years indicates the company is losing ground to competitors
- Waning returns on capital imply its previous profit engines are losing steam
- High net-debt-to-EBITDA ratio of 5× could force the company to raise capital at unfavorable terms if market conditions deteriorate
Somnigroup’s stock price of $65.84 implies a valuation ratio of 22.9x forward P/E. Dive into our free research report to see why there are better opportunities than SGI.
One Consumer Discretionary Stock to Watch:
Grand Canyon Education (LOPE)
Rolling One-Year Beta: 0.89
Founded in 1949, Grand Canyon Education (NASDAQ: LOPE) is an educational services provider known for its operation at Grand Canyon University.
Why Do We Like LOPE?
- Excellent operating margin of 26.5% highlights the efficiency of its business model
- ROIC punches in at 30.2%, illustrating management’s expertise in identifying profitable investments, and its returns are growing as it capitalizes on even better market opportunities
At $185.13 per share, Grand Canyon Education trades at 20.8x forward P/E. Is now the right time to buy? See for yourself in our comprehensive research report, it’s free.
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