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.

Jack in the Box (JACK)

Rolling One-Year Beta: 0.41

Delighting customers since its inception in 1951, Jack in the Box (NASDAQ: JACK) is a distinctive fast-food chain known for its bold flavors, innovative menu items, and quirky marketing.

Why Are We Hesitant About JACK?

1. Disappointing same-store sales over the past two years show customers aren’t responding well to its menu offerings and dining experience
2. Efficiency has decreased over the last year as its operating margin fell by 10.6 percentage points
3. 10× net-debt-to-EBITDA ratio shows it’s overleveraged and increases the probability of shareholder dilution if things turn unexpectedly

Jack in the Box’s stock price of $25.27 implies a valuation ratio of 4.5x forward price-to-earnings. Read our free research report to see why you should think twice about including JACK in your portfolio.

Denny's (DENN)

Rolling One-Year Beta: 0.93

Open around the clock, Denny’s (NASDAQ: DENN) is a chain of diner restaurants serving breakfast and traditional American fare.

Why Should You Sell DENN?

1. Reduction in its number of restaurants signals a focus on profitability through targeted consolidation
2. Subscale operations are evident in its revenue base of $452.3 million, meaning it has fewer distribution channels than its larger rivals
3. Free cash flow margin dropped by 13.2 percentage points over the last year, implying the company became more capital intensive as competition picked up

At $3.59 per share, Denny's trades at 6.2x forward price-to-earnings. Check out our free in-depth research report to learn more about why DENN doesn’t pass our bar.

Smith & Wesson (SWBI)

Rolling One-Year Beta: 0.38

With a history dating back to 1852, Smith & Wesson (NASDAQ: SWBI) is a firearms manufacturer known for its handguns and rifles.

Why Is SWBI Risky?

1. Flat sales over the last five years suggest it must innovate and find new ways to grow
2. Cash burn makes us question whether it can achieve sustainable long-term growth
3. Eroding returns on capital suggest its historical profit centers are aging

Smith & Wesson is trading at $9.63 per share, or 17x forward price-to-earnings. If you’re considering SWBI for your portfolio, see our FREE research report to learn more.

Stocks We Like More

Market indices reached historic highs following Donald Trump’s presidential victory in November 2024, but the outlook for 2025 is clouded by new trade policies that could impact business confidence and growth.

While this has caused many investors to adopt a "fearful" wait-and-see approach, we’re leaning into our best ideas that can grow regardless of the political or macroeconomic climate. Take advantage of Mr. Market 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 175% over the last five years.

Stocks that made our list in 2019 include now familiar names such as Nvidia (+2,183% between December 2019 and December 2024) as well as under-the-radar businesses like Comfort Systems (+751% five-year return). Find your next big winner with StockStory today for free.