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. Keeping that in mind, here are three low-volatility stocks to steer clear of and a few better alternatives.
Acushnet (GOLF)
Rolling One-Year Beta: 0.85
Producer of the acclaimed Titleist Pro V1 golf ball, Acushnet (NYSE: GOLF) is a design and manufacturing company specializing in performance-driven golf products.
Why Do We Avoid GOLF?
- Lackluster 10.1% annual revenue growth over the last five years indicates the company is losing ground to competitors
- Ability to fund investments or reward shareholders with increased buybacks or dividends is restricted by its weak free cash flow margin of 7.2% for the last two years
- Waning returns on capital from an already weak starting point displays the inefficacy of management’s past and current investment decisions
Acushnet is trading at $95.69 per share, or 24x forward P/E. Check out our free in-depth research report to learn more about why GOLF doesn’t pass our bar.
Universal Technical Institute (UTI)
Rolling One-Year Beta: 0.57
Founded in 1965, Universal Technical Institute (NYSE: UTI) is a leading provider of technical training programs, specializing in automotive, diesel, collision repair, motorcycle, and marine technicians.
Why Should You Dump UTI?
- Performance surrounding its new students has lagged its peers
- Capital intensity will likely ramp up in the next year as its free cash flow margin is expected to contract by 4.1 percentage points
- ROIC hasn’t moved, making investors question whether its recent investments can increase profitability
Universal Technical Institute’s stock price of $28 implies a valuation ratio of 14.6x forward EV-to-EBITDA. Dive into our free research report to see why there are better opportunities than UTI.
Connection (CNXN)
Rolling One-Year Beta: 0.86
Starting as a small computer products seller in 1982 and evolving into a Fortune 1000 company, Connection (NASDAQ: CNXN) is a technology solutions provider that helps businesses and government agencies design, purchase, implement, and manage their IT infrastructure and systems.
Why Do We Steer Clear of CNXN?
- Sales were flat over the last two years, indicating it’s failed to expand this cycle
- Earnings per share lagged its peers over the last two years as they only grew by 4.5% annually
- Low free cash flow margin of 3.1% for the last five years gives it little breathing room, constraining its ability to self-fund growth or return capital to shareholders
At $58.05 per share, Connection trades at 16x forward P/E. To fully understand why you should be careful with CNXN, check out our full research report (it’s free).
Stocks We Like More
Your portfolio can’t afford to be based on yesterday’s story. The risk in a handful of heavily crowded stocks is rising daily.
The names generating the next wave of massive growth are right here in 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 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-micro-cap company Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today.
