Low-volatility stocks may offer stability, but that often comes at the cost of slower growth and the upside potential of more dynamic companies.
Luckily for you, StockStory helps you navigate which companies are truly worth holding. Keeping that in mind, here is one low-volatility stock that could succeed under all market conditions and two stuck in limbo.
Two Stocks to Sell:
Etsy (ETSY)
Rolling One-Year Beta: 0.54
Founded by a struggling amateur furniture maker Robert Kalin and his two friends, Etsy (NASDAQ:ETSY) is one of the world’s largest online marketplaces, focusing on handmade or vintage items.
Why Are We Hesitant About ETSY?
- Market opportunities are plateauing as its active buyers were flat over the last two years
- Estimated sales decline of 1.8% for the next 12 months implies a challenging demand environment
- Earnings per share lagged its peers over the last three years as they only grew by 2.6% annually
Etsy is trading at $47.10 per share, or 6.7x forward EV/EBITDA. Check out our free in-depth research report to learn more about why ETSY doesn’t pass our bar.
Tennant (TNC)
Rolling One-Year Beta: 0.75
As the world’s largest manufacturer of autonomous mobile robots, Tennant (NYSE:TNC) designs, manufactures, and sells cleaning products to various sectors.
Why Are We Cautious About TNC?
- Sales trends were unexciting over the last five years as its 2.3% annual growth was below the typical industrials company
- Projected sales decline of 1% for the next 12 months points to a tough demand environment ahead
- 7.1 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
At $76.74 per share, Tennant trades at 12.4x forward P/E. To fully understand why you should be careful with TNC, check out our full research report (it’s free).
One Stock to Buy:
Lululemon (LULU)
Rolling One-Year Beta: 0.72
Originally serving yogis and hockey players, Lululemon (NASDAQ:LULU) is a designer, distributor, and retailer of athletic apparel for men and women.
Why Are We Bullish on LULU?
- Comparable store sales rose by 8.2% on average over the past two years, demonstrating its ability to drive increased spending at existing locations
- Unique assortment of products and pricing power lead to a best-in-class gross margin of 58.8%
- LULU is a free cash flow machine with the flexibility to invest in growth initiatives or return capital to shareholders
Lululemon’s stock price of $324 implies a valuation ratio of 21.1x forward P/E. Is now the right time to buy? See for yourself in our comprehensive research report, it’s free.
Stocks We Like Even More
Market indices reached historic highs following Donald Trump’s presidential victory in November 2024, but the outlook for 2025 is clouded by new trade policies that could impact business confidence and growth.
While this has caused many investors to adopt a "fearful" wait-and-see approach, we’re leaning into our best ideas that can grow regardless of the political or macroeconomic climate. Take advantage of Mr. Market by checking out our Top 6 Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 176% over the last five years.
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.