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 are three low-volatility stocks to steer clear of and a few better alternatives.
Bumble (BMBL)
Rolling One-Year Beta: 0.83
Started by the co-founder of Tinder, Whitney Wolfe Herd, Bumble (NASDAQ: BMBL) is a leading dating app built with women at the center.
Why Does BMBL Give Us Pause?
- Sales trends were unexciting over the last three years as its 7.2% annual growth was below the typical consumer internet company
- Decision to emphasize platform growth over monetization has contributed to 4.6% annual declines in its average revenue per buyer
- Estimated sales decline of 9.5% for the next 12 months implies a challenging demand environment
Bumble is trading at $7.03 per share, or 2.5x forward EV/EBITDA. To fully understand why you should be careful with BMBL, check out our full research report (it’s free).
Insperity (NSP)
Rolling One-Year Beta: 0.92
Pioneering the professional employer organization (PEO) industry it helped establish, Insperity (NYSE: NSP) provides human resources outsourcing services to small and medium-sized businesses, handling payroll, benefits, compliance, and HR administration.
Why Does NSP Worry Us?
- Muted 3.2% annual revenue growth over the last two years shows its demand lagged behind its business services peers
- Performance over the past five years shows its incremental sales were much less profitable, as its earnings per share fell by 13% annually
- Short cash runway increases the probability of a capital raise that dilutes existing shareholders
At $52.06 per share, Insperity trades at 16.2x forward P/E. If you’re considering NSP for your portfolio, see our FREE research report to learn more.
Markel Group (MKL)
Rolling One-Year Beta: 0.65
Often referred to as a "mini Berkshire Hathaway" for its three-engine business model of insurance, investments, and wholly-owned businesses, Markel Group (NYSE: MKL) is a specialty insurance company that underwrites complex risks, manages investment portfolios, and owns a diverse collection of operating businesses.
Why Do We Think Twice About MKL?
- Net premiums earned only expanded by 2.9% annually over the last two years, trailing its insurance peers as its scale limited incremental business
- Forecasted revenue decline of 6.4% for the upcoming 12 months implies demand will fall off a cliff
- Earnings per share lagged its peers over the last two years as they only grew by 8% annually
Markel Group’s stock price of $1,918 implies a valuation ratio of 1.4x forward P/B. Dive into our free research report to see why there are better opportunities than MKL.
Stocks We Like More
Trump’s April 2025 tariff bombshell triggered a massive market selloff, but stocks have since staged an impressive recovery, leaving those who panic sold on the sidelines.
Take advantage of the rebound by checking 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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