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.
Choosing the wrong investments can cause you to fall behind, which is why we started StockStory - to separate the winners from the losers. That said, here are three low-volatility stocks to steer clear of and a few better alternatives.
eBay (EBAY)
Rolling One-Year Beta: 0.49
Originally known as the first online auction site, eBay (NASDAQ:EBAY) is one of the world’s largest online marketplaces.
Why Is EBAY Not Exciting?
- Active Buyers have stagnated over the last two years, indicating its platform may be struggling to differentiate itself from competitors
- Projected sales growth of 4.2% for the next 12 months suggests sluggish demand
- Day-to-day expenses have swelled relative to revenue over the last few years as its EBITDA margin fell by 5.7 percentage points
eBay’s stock price of $75 implies a valuation ratio of 10.9x forward EV/EBITDA. If you’re considering EBAY for your portfolio, see our FREE research report to learn more.
Reynolds (REYN)
Rolling One-Year Beta: 0.03
Best known for its aluminum foil, Reynolds (NASDAQ:REYN) is a household products company whose products focus on food storage, cooking, and waste.
Why Are We Out on REYN?
- Falling unit sales over the past two years suggest it might have to lower prices to stimulate growth
- Projected sales decline of 1.4% for the next 12 months points to an even tougher demand environment ahead
- 6.1 percentage point decline in its free cash flow margin over the last year reflects the company’s increased investments to defend its market position
Reynolds is trading at $21.88 per share, or 13.2x forward P/E. Dive into our free research report to see why there are better opportunities than REYN.
Hope Bancorp (HOPE)
Rolling One-Year Beta: 0.87
With roots in serving Korean-American communities and now expanded to a multi-ethnic clientele across 12 states, Hope Bancorp (NASDAQ:HOPE) operates Bank of Hope, providing commercial and retail banking services with a focus on serving multi-ethnic communities across the United States.
Why Do We Pass on HOPE?
- Annual net interest income declines of 3.2% for the past four years show its loan book struggled during this cycle
- Overall productivity fell over the last four years as its plummeting sales were accompanied by a degrading efficiency ratio
- Performance over the past five years shows each sale was less profitable as its earnings per share dropped by 7.6% annually, worse than its revenue
At $11.84 per share, Hope Bancorp trades at 0.7x forward P/B. Read our free research report to see why you should think twice about including HOPE in your portfolio.
High-Quality Stocks for All Market Conditions
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 9 Market-Beating Stocks. 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
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