3 Low-Volatility Stocks with Questionable Fundamentals
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. Keeping that in mind, here are three low-volatility stocks that don’t make the cut and some better opportunities instead.
F5 (FFIV)
Rolling One-Year Beta: 0.89
Originally named after the F5 tornado, the most powerful on the meteorological scale, F5 (NASDAQ:FFIV) provides security and delivery solutions that protect applications across cloud, data center, and edge environments for large organizations.
Why Does FFIV Worry Us?
- Customers were hesitant to make long-term commitments to its software as its ARR averaged 12.3% declines over the last year
- Estimated sales growth of 1.6% for the next 12 months implies demand will slow from its two-year trend
- Operating profits and efficiency rose over the last year as it benefited from some fixed cost leverage
F5’s stock price of $260.44 implies a valuation ratio of 4.8x forward price-to-sales. If you’re considering FFIV for your portfolio, see our FREE research report to learn more.
Columbia Sportswear (COLM)
Rolling One-Year Beta: 0.65
Originally founded as a hat store in 1938, Columbia Sportswear (NASDAQ:COLM) is a manufacturer of outerwear, sportswear, and footwear designed for outdoor enthusiasts.
Why Do We Think COLM Will Underperform?
- Constant currency growth was below our standards over the past two years, suggesting it might need to invest in product improvements to get back on track
- Forecasted free cash flow margin suggests the company will fail to improve its cash conversion over the next year
- Shrinking returns on capital from an already weak position reveal that neither previous nor ongoing investments are yielding the desired results
Columbia Sportswear is trading at $57.01 per share, or 19.5x forward P/E. To fully understand why you should be careful with COLM, check out our full research report (it’s free for active Edge members).
PACCAR (PCAR)
Rolling One-Year Beta: 0.93
Founded more than a century ago, PACCAR (NASDAQ:PCAR) designs and manufactures commercial trucks of various weights and sizes for the commercial trucking industry.
Why Does PCAR Fall Short?
- 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
- Sales are expected to decline once again over the next 12 months as it continues working through a challenging demand environment
- Falling earnings per share over the last two years has some investors worried as stock prices ultimately follow EPS over the long term
At $114.54 per share, PACCAR trades at 22.7x forward P/E. Check out our free in-depth research report to learn more about why PCAR doesn’t pass our bar.
Stocks We Like More
If your portfolio success hinges on just 4 stocks, your wealth is built on fragile ground. You have a small window to secure high-quality assets before the market widens and these prices disappear.
Don’t wait for the next volatility shock. Check out our Top 9 Market-Beating Stocks. 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-small-cap company Comfort Systems (+782% 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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