Stability is great, but low-volatility stocks may struggle to deliver market-beating returns over time as they sometimes underperform during bull markets.
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 that don’t make the cut and some better opportunities instead.
Alarm.com (ALRM)
Rolling One-Year Beta: 0.88
Processing over 325 billion data points annually from more than 150 million connected devices, Alarm.com (NASDAQ: ALRM) provides cloud-based platforms that enable residential and commercial property owners to remotely monitor and control their security, video, energy, and other connected devices.
Why Do We Steer Clear of ALRM?
- Products, pricing, or go-to-market strategy may need some adjustments as its 8.7% average billings growth over the last year was weak
- Estimated sales growth of 4% for the next 12 months implies demand will slow from its two-year trend
- Operating margin didn’t move over the last year, showing it couldn’t increase its efficiency
At $53.16 per share, Alarm.com trades at 2.7x forward price-to-sales. Check out our free in-depth research report to learn more about why ALRM doesn’t pass our bar.
CRA (CRAI)
Rolling One-Year Beta: 0.32
Often retained for high-stakes matters with multibillion-dollar implications, CRA International (NASDAQ: CRAI) provides economic, financial, and management consulting services to corporations, law firms, and government agencies for litigation, regulatory proceedings, and business strategy.
Why Does CRAI Worry Us?
- Smaller revenue base of $794.6 million means it hasn’t achieved the economies of scale that some industry juggernauts enjoy
- Estimated sales growth of 1.8% for the next 12 months implies demand will slow from its two-year trend
- Free cash flow margin shrank by 8.7 percentage points over the last five years, suggesting the company is consuming more capital to stay competitive
CRA is trading at $158.47 per share, or 17.9x forward P/E. If you’re considering CRAI for your portfolio, see our FREE research report to learn more.
NOV (NOV)
Rolling One-Year Beta: 0.12
With roots stretching back to 1862 when it began making equipment for early oil fields, NOV (NYSE: NOV) manufactures drilling rigs, drill bits, pumps, and other equipment used to drill oil and gas wells.
Why Does NOV Give Us Pause?
- Products and services are facing significant end-market challenges during this cycle as sales have declined by 1.4% annually over the last ten years
- High extraction costs and unfavorable asset economics are reflected in its low gross margin of 20.6%
- Ability to fund investments or reward shareholders with increased buybacks or dividends is restricted by its weak free cash flow margin of 2.9% for the last five years
NOV’s stock price of $20.15 implies a valuation ratio of 18.1x forward P/E. To fully understand why you should be careful with NOV, check out our full research report (it’s free).
High-Quality Stocks for All Market Conditions
ALSO WORTH WATCHING: Top 5 Momentum Stocks. The best time to own a great stock is when the market is finally noticing it. These aren’t just high-quality businesses. Something is happening with them right now. Elite fundamentals meet near-term momentum — both boxes checked at the same time.
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Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Exlservice (+271% between June 2020 and June 2025). Find your next big winner with StockStory today.
