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.
Choosing the wrong investments can cause you to fall behind, which is why we started StockStory - to separate the winners from the losers. Keeping that in mind, here are three low-volatility stocks to avoid and some better opportunities instead.
Kennametal (KMT)
Rolling One-Year Beta: 0.67
Involved in manufacturing hard tips of anti-tank projectiles in World War II, Kennametal (NYSE: KMT) is a provider of industrial materials and tools for various sectors.
Why Are We Out on KMT?
- Customers postponed purchases of its products and services this cycle as its revenue declined by 1.1% annually over the last two years
- 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
- Earnings growth over the last two years fell short of the peer group average as its EPS only increased by 1.9% annually
Kennametal is trading at $38.61 per share, or 15.7x forward P/E. Check out our free in-depth research report to learn more about why KMT doesn’t pass our bar.
Option Care Health (OPCH)
Rolling One-Year Beta: 0.39
With a nationwide network of 177 locations serving 43 states and a team of over 4,500 clinicians, Option Care Health (NASDAQ: OPCH) is the largest independent provider of home and alternate site infusion services, delivering medications and clinical support to patients across the United States.
Why Are We Hesitant About OPCH?
Option Care Health’s stock price of $35.22 implies a valuation ratio of 19.5x forward P/E. To fully understand why you should be careful with OPCH, check out our full research report (it’s free).
Enact Holdings (ACT)
Rolling One-Year Beta: 0.46
Playing a critical role in helping first-time homebuyers access the housing market, Enact Holdings (NASDAQ: ACT) provides private mortgage insurance that enables lenders to offer home loans with lower down payments while protecting against borrower defaults.
Why Are We Cautious About ACT?
- Net premiums earned plateaued over the last five years, signaling weak incremental demand for its insurance policies
- Operational productivity has decreased over the last two years as its combined ratio worsened by 7.3 percentage points
- Earnings growth underperformed the sector average over the last two years as its EPS grew by just 4.9% annually
At $41.60 per share, Enact Holdings trades at 1x forward P/B. Read our free research report to see why you should think twice about including ACT in your portfolio.
Stocks We Like More
If your portfolio success hinges on just 4 stocks, your wealth is built on fragile ground. You have a small window to secure high-quality assets before the market widens and these prices disappear.
Don’t wait for the next volatility shock. Check 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 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-small-cap company Exlservice (+354% five-year return). Find your next big winner with StockStory today.
