3 Low-Volatility Stocks in Hot Water

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. Keeping that in mind, here are three low-volatility stocks to steer clear of and a few better alternatives.

Agilysys (AGYS)

Rolling One-Year Beta: 0.80

Originally a subsidiary of Pioneer-Standard Electronics that distributed electronic components, Agilysys (NASDAQ:AGYS) offers a software-as-service platform that helps hotels, resorts, restaurants, and other hospitality businesses manage their operations and workflows.

Why Does AGYS Fall Short?

1. Sales trends were unexciting over the last three years as its 19.2% annual growth was below the typical software company
2. Steep infrastructure costs and weaker unit economics for a software company are reflected in its low gross margin of 62.4%
3. Free cash flow margin is forecasted to shrink by 1.2 percentage points in the coming year, suggesting the company will consume more capital to keep up with its competitors

Agilysys’s stock price of $113.01 implies a valuation ratio of 10.4x forward price-to-sales. Read our free research report to see why you should think twice about including AGYS in your portfolio.

NV5 Global (NVEE)

Rolling One-Year Beta: 0.27

Operating from over 100 locations across the U.S. and internationally, NV5 Global (NASDAQ:NVEE) provides engineering, environmental, geospatial, and technical consulting services to public and private sector clients for infrastructure and building projects.

Why Is NVEE Not Exciting?

1. Costs have risen faster than its revenue over the last five years, causing its adjusted operating margin to decline by 5.1 percentage points
2. Incremental sales over the last two years were much less profitable as its earnings per share fell by 2.8% annually while its revenue grew
3. Free cash flow margin dropped by 13.7 percentage points over the last five years, implying the company became more capital intensive as competition picked up

At $23.08 per share, NV5 Global trades at 17.4x forward P/E. Check out our free in-depth research report to learn more about why NVEE doesn’t pass our bar.

TFS Financial (TFSL)

Rolling One-Year Beta: 0.58

Tracing its roots back to 1938 during the Great Depression era when savings and loans were vital to homeownership, TFS Financial (NASDAQ:TFSL) is a savings and loan holding company that provides mortgage lending, deposit services, and other retail banking products primarily in Ohio and Florida.

Why Do We Avoid TFSL?

1. Annual net interest income growth of 4.9% over the last four years was below our standards for the bank sector
2. Net interest margin of 1.7% is well below other banks, signaling its loans aren’t very profitable
3. Annual tangible book value per share growth of 1.4% over the last two years was below our standards for the bank sector

TFS Financial is trading at $13.28 per share, or 2x forward P/B. Dive into our free research report to see why there are better opportunities than TFSL.

Stocks We Like More

Donald Trump’s victory in the 2024 U.S. Presidential Election sent major indices to all-time highs, but stocks have retraced as investors debate the health of the economy and the potential impact of tariffs.

While this leaves much uncertainty around 2025, a few companies are poised for long-term gains regardless of the political or macroeconomic climate, like our Top 5 Strong Momentum Stocks for this week. 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-micro-cap company Tecnoglass (+1,754% 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