1 Safe-and-Steady Stock on Our Buy List and 2 Facing Challenges
Low-volatility stocks may offer stability, but that often comes at the cost of slower growth and the upside potential of more dynamic companies.
Finding the right balance between safety and returns isn’t easy, which is why StockStory is here to help. That said, here is one low-volatility stock that could offer consistent gains and two that may not keep up.
Two Stocks to Sell:
Covista (CVSA)
Rolling One-Year Beta: 0.55
Formerly known as DeVry Education Group, Covista (NYSE:CVSA) is a global provider of workforce solutions and educational services.
Why Are We Bearish on CVSA?
- 16.6% annual revenue growth over the last five years was slower than its consumer discretionary peers
- Capital intensity will likely ramp up in the next year as its free cash flow margin is expected to contract by 5.8 percentage points
- ROIC of 9.4% reflects management’s challenges in identifying attractive investment opportunities
Covista’s stock price of $126.69 implies a valuation ratio of 14.1x forward P/E. If you’re considering CVSA for your portfolio, see our FREE research report to learn more.
Waste Connections (WCN)
Rolling One-Year Beta: -0.14
Operating a network of municipal solid waste landfills in the U.S. and Canada, Waste Connections (NYSE:WCN) is North America's third-largest waste management company providing collection, disposal, and recycling services.
Why Does WCN Give Us Pause?
- Estimated sales growth of 5.8% for the next 12 months implies demand will slow from its two-year trend
- 2.5 percentage point decline in its free cash flow margin over the last five years reflects the company’s increased investments to defend its market position
- Low returns on capital reflect management’s struggle to allocate funds effectively, and its falling returns suggest its earlier profit pools are drying up
At $155.24 per share, Waste Connections trades at 26.8x forward P/E. To fully understand why you should be careful with WCN, check out our full research report (it’s free).
One Stock to Buy:
Ulta (ULTA)
Rolling One-Year Beta: 0.91
Offering high-end prestige brands as well as lower-priced, mass-market ones, Ulta Beauty (NASDAQ:ULTA) is an American retailer that sells makeup, skincare, haircare, and fragrance products.
Why Is ULTA a Good Business?
- Offensive push to build new stores and attack its untapped market opportunities is backed by its same-store sales growth
- Brick-and-mortar locations are witnessing elevated demand as their same-store sales growth averaged 4.1% over the past two years
- Industry-leading 32% return on capital demonstrates management’s skill in finding high-return investments
Ulta is trading at $548.05 per share, or 17.4x forward P/E. Is now a good time to buy? Find out in our full research report, it’s free.
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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-micro-cap company Tecnoglass (+1,552% between June 2020 and June 2025). Find your next big winner with StockStory today.