3 Low-Volatility Stocks in Hot Water
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.
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 avoid and some better opportunities instead.
Churchill Downs (CHDN)
Rolling One-Year Beta: 0.49
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 Are We Wary of CHDN?
-
Estimated sales growth of 4.8% for the next 12 months implies demand will slow from its two-year trend
-
Poor free cash flow margin of 4.5% for the last two years limits its freedom to invest in growth initiatives, execute share buybacks, or pay dividends
-
ROIC of 7.8% reflects management’s challenges in identifying attractive investment opportunities
Churchill Downs’s stock price of $100.95 implies a valuation ratio of 15.5x forward P/E. Dive into our free research report to see why there are better opportunities than CHDN.
Malibu Boats (MBUU)
Rolling One-Year Beta: 0.54
Founded in California in 1982, Malibu Boats (NASDAQ:MBUU) is a manufacturer of high-performance sports boats and luxury watercrafts.
Why Should You Sell MBUU?
-
Number of boats sold has disappointed over the past two years, indicating weak demand for its offerings
-
Earnings per share fell by 28.9% annually over the last five years while its revenue was flat, showing each sale was less profitable
-
Diminishing returns on capital from an already low starting point show that neither management’s prior nor current bets are going as planned
Malibu Boats is trading at $31.85 per share, or 10.8x forward P/E. Read our free research report to see why you should think twice about including MBUU in your portfolio, it’s free.
Iridium (IRDM)
Rolling One-Year Beta: 0.78
With a constellation of 66 low-earth orbit satellites providing coverage to every inch of the planet, Iridium Communications (NASDAQ:IRDM) operates a global satellite network that provides voice and data services to customers in remote areas where traditional telecommunications are unavailable.
Why Does IRDM Give Us Pause?
-
Revenue base of $841.7 million puts it at a disadvantage compared to larger competitors exhibiting economies of scale
-
Free cash flow margin shrank by 3.2 percentage points over the last five years, suggesting the company is consuming more capital to stay competitive
-
Below-average returns on capital indicate management struggled to find compelling investment opportunities
At $30.14 per share, Iridium trades at 20.4x forward P/E. To fully understand why you should be careful with IRDM, check out our full research report (it’s free).
High-Quality Stocks for All Market Conditions
The market surged in 2024 and reached record highs after Donald Trump’s presidential victory in November, but questions about new economic policies are adding much uncertainty for 2025.
While the crowd speculates what might happen next, we’re homing in on the companies that can succeed regardless of the political or macroeconomic environment. Put yourself in the driver’s seat and build a durable portfolio 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-small-cap company Exlservice (+354% 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
Exploring three low-volatility stocks currently facing heated market scrutiny underscores the importance of stable performance amidst volatile financial events, highlighting their longevity and resilience in turbulent times.
Reviewing '3 Low-Volatility Stocks in Hot Water' presents a nuanced analysis underpinning the choice of defensive stocks amidst market turmoil, offering insights that could be lifesavers for investors seeking stability during turbulent times.
In an unexpected turn of events, even the trinity consisting solely from low-volatility stocks finds themselves at a boiling point in this volatile market cycle.
The article on 3 Low-Volatility Stocks currently facing a rough stretch in the market painted an intriguing analysis with mixed potential amidst uncertainty, underscoring how meticulous research serves as防火墙 shield against short term tides.
The article '3 Low-Volatility Stocks in Hot Water' provides a thoughtful exploration of investments with lesser market fluctuations that have found themselves amidst significant industry momentum, showcasing potential stability despite the heated trends.
The article '3 Low-Volatility Stocks in Hot Water' provides an insightful examination of overlooked investment opportunities with potential resilience amid turbulent markets, offering a valuable perspective for risk management and longterm mindset investors.
The article about 3 Low-Volatility Stocks in Hot Water provides a unparalleled insight into lesser known but resilient picks amidst the market turmoil, showcasing effective strategies for mitigating risks without substantially compromising returns.
A thought-provoking piece unveiling three low volatility stocks navigating through volatile market conditions with resilience, demonstrating why a balanced approach to investing can lead the way in uncertain times. Great analysis for risk conscious investors seeking stability amidst turbulence!
