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 are three low-volatility stocks to avoid and some better opportunities instead.
Calavo (CVGW)
Rolling One-Year Beta: 0.64
A trailblazer in the avocado industry, Calavo Growers (NASDAQ: CVGW) is a pioneering California-based provider of high-quality avocados and other fresh food products.
Why Do We Steer Clear of CVGW?
- Products aren't resonating with the market as its revenue declined by 17.2% annually over the last three years
- Subscale operations are evident in its revenue base of $693.7 million, meaning it has fewer distribution channels than its larger rivals
- Gross margin of 10.1% is an output of its commoditized products
At $20.67 per share, Calavo trades at 11.8x forward P/E. Check out our free in-depth research report to learn more about why CVGW doesn’t pass our bar.
A. O. Smith (AOS)
Rolling One-Year Beta: 0.75
Credited with the invention of the glass-lined water heater, A.O. Smith (NYSE: AOS) manufactures water heating and treatment products for various industries.
Why Do We Think Twice About AOS?
- 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
- Estimated sales growth of 2.9% for the next 12 months is soft and implies weaker demand
- Earnings growth underperformed the sector average over the last two years as its EPS grew by just 1.3% annually
A. O. Smith’s stock price of $68.03 implies a valuation ratio of 16.8x forward P/E. To fully understand why you should be careful with AOS, check out our full research report (it’s free for active Edge members).
Donaldson (DCI)
Rolling One-Year Beta: 0.84
Playing a vital role in the historic Apollo 11 mission, Donaldson (NYSE: DCI) manufacturers and sells filtration equipment for various industries.
Why Does DCI Worry Us?
- Muted 4.2% annual revenue growth over the last two years shows its demand lagged behind its industrials peers
- Core business is underperforming as its organic revenue has disappointed over the past two years, suggesting it might need acquisitions to stimulate growth
- Estimated sales growth of 3.6% for the next 12 months is soft and implies weaker demand
Donaldson is trading at $92.40 per share, or 19.6x forward EV-to-EBITDA. Read our free research report to see why you should think twice about including DCI in your portfolio.
Stocks We Like More
The market’s up big this year - but there’s a catch. Just 4 stocks account for half the S&P 500’s entire gain. That kind of concentration makes investors nervous, and for good reason. While everyone piles into the same crowded names, smart investors are hunting quality where no one’s looking - and paying a fraction of the price. Check out the high-quality names we’ve flagged in 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-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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