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 to avoid and some better opportunities instead.

Altice (ATUS)

Rolling One-Year Beta: 0.84

Based in Long Island City, Altice USA (NYSE: ATUS) is a telecommunications company offering cable, internet, telephone, and television services across the United States.

Why Should You Sell ATUS?

1. Demand for its offerings was relatively low as its number of broadband subscribers has underwhelmed
2. Sales were less profitable over the last five years as its earnings per share fell by 31.1% annually, worse than its revenue declines
3. Limited cash reserves may force the company to seek unfavorable financing terms that could dilute shareholders

Altice is trading at $2.40 per share, or 0.3x forward EV-to-EBITDA. Dive into our free research report to see why there are better opportunities than ATUS.

Churchill Downs (CHDN)

Rolling One-Year Beta: 0.60

Famous for hosting the Kentucky Derby, Churchill Downs (NASDAQ: CHDN) operates a horse racing, online wagering, and gaming entertainment business in the United States.

Why Does CHDN Worry Us?

1. Muted 13.6% annual revenue growth over the last two years shows its demand lagged behind its consumer discretionary peers
2. Estimated sales growth of 5.3% for the next 12 months implies demand will slow from its two-year trend
3. Low returns on capital reflect management’s struggle to allocate funds effectively

Churchill Downs’s stock price of $98.14 implies a valuation ratio of 14.3x forward P/E. If you’re considering CHDN for your portfolio, see our FREE research report to learn more.

Stratasys (SSYS)

Rolling One-Year Beta: 0.90

Born from the Founder’s idea of making a toy frog with a glue gun, Stratasys (NASDAQ: SSYS) offers 3D printers and related materials, software, and services to many industries.

Why Are We Out on SSYS?

1. Products and services are facing end-market challenges during this cycle, as seen in its flat sales over the last five years
2. Poor expense management has led to operating margin losses
3. Capital intensity has ramped up over the last five years as its free cash flow margin decreased by 6.9 percentage points

At $11.23 per share, Stratasys trades at 31.3x forward P/E. Read our free research report to see why you should think twice about including SSYS in your portfolio.

High-Quality Stocks for All Market Conditions

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