A stock with low volatility can be reassuring, but it doesn’t always mean strong long-term performance. Investors who prioritize stability may miss out on higher-reward opportunities elsewhere.
Luckily for you, StockStory helps you navigate which companies are truly worth holding. Keeping that in mind, here are three low-volatility stocks that don’t make the cut and some better opportunities instead.
Columbia Sportswear (COLM)
Rolling One-Year Beta: 0.37
Originally founded as a hat store in 1938, Columbia Sportswear (NASDAQ: COLM) is a manufacturer of outerwear, sportswear, and footwear designed for outdoor enthusiasts.
Why Do We Pass on COLM?
- Weak constant currency growth over the past two years indicates challenges in maintaining its market share
- Sales are projected to be flat over the next 12 months and imply weak demand
- Shrinking returns on capital suggest that increasing competition is eating into the company’s profitability
Columbia Sportswear’s stock price of $59.91 implies a valuation ratio of 16.8x forward P/E. If you’re considering COLM for your portfolio, see our FREE research report to learn more.
FTI Consulting (FCN)
Rolling One-Year Beta: 0.44
With a team of experts deployed across 30+ countries to tackle complex business challenges, FTI Consulting (NYSE: FCN) is a global business advisory firm that helps organizations manage change, mitigate risk, and resolve disputes across financial, legal, operational, and regulatory matters.
Why Are We Cautious About FCN?
- Estimated sales growth of 1.3% for the next 12 months implies demand will slow from its two-year trend
- Costs have risen faster than its revenue over the last five years, causing its adjusted operating margin to decline by 2.8 percentage points
- Free cash flow margin dropped by 5.6 percentage points over the last five years, implying the company became more capital intensive as competition picked up
FTI Consulting is trading at $166.22 per share, or 20.6x forward P/E. Check out our free in-depth research report to learn more about why FCN doesn’t pass our bar.
Northwest Bancshares (NWBI)
Rolling One-Year Beta: 0.68
Founded in 1896 and operating across Pennsylvania, New York, Ohio, and Indiana, Northwest Bancshares (NASDAQ: NWBI) is a bank holding company that operates Northwest Bank, providing personal and business banking, investment management, and trust services.
Why Do We Avoid NWBI?
- Muted 3.2% annual net interest income growth over the last four years shows its demand lagged behind its bank peers
- Capital trends were unexciting over the last five years as its 1.4% annual tangible book value per share growth was below the typical bank company
- Forecasted tangible book value per share decline of 7.1% for the upcoming 12 months implies profitability will deteriorate significantly
At $13.50 per share, Northwest Bancshares trades at 1x forward P/B. Dive into our free research report to see why there are better opportunities than NWBI.
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