Stability is great, but low-volatility stocks may struggle to deliver market-beating returns over time as they sometimes underperform during bull markets.
Finding the right balance between safety and returns isn’t easy, which is why StockStory is here to help. That said, here are three low-volatility stocks to steer clear of and a few better alternatives.
LKQ (LKQ)
Rolling One-Year Beta: 0.37
A global distributor of vehicle parts and accessories, LKQ (NASDAQ: LKQ) offers its customers a comprehensive selection of high-quality, affordably priced automobile products.
Why Do We Steer Clear of LKQ?
- Core business is underperforming as its organic revenue has disappointed over the past two years, suggesting it might need acquisitions to stimulate growth
- Forecasted free cash flow margin suggests the company will fail to improve its cash conversion over the next year
- Diminishing returns on capital from an already low starting point show that neither management’s prior nor current bets are going as planned
LKQ is trading at $30.22 per share, or 9.6x forward P/E. If you’re considering LKQ for your portfolio, see our FREE research report to learn more.
Supernus Pharmaceuticals (SUPN)
Rolling One-Year Beta: 0.59
With a diverse portfolio of eight FDA-approved medications targeting neurological conditions, Supernus Pharmaceuticals (NASDAQ: SUPN) develops and markets treatments for central nervous system disorders including epilepsy, ADHD, Parkinson's disease, and migraine.
Why Do We Pass on SUPN?
- Annual revenue growth of 5.9% over the last five years was below our standards for the healthcare sector
- Modest revenue base of $681.5 million gives it less fixed cost leverage and fewer distribution channels than larger companies
- Eroding returns on capital from an already low base indicate that management’s recent investments are destroying value
At $49.66 per share, Supernus Pharmaceuticals trades at 19.4x forward P/E. To fully understand why you should be careful with SUPN, check out our full research report (it’s free for active Edge members).
Westamerica Bancorporation (WABC)
Rolling One-Year Beta: 0.76
Founded in 1884 and serving communities from Mendocino County in the north to Kern County in the south, Westamerica Bancorporation (NASDAQ: WABC) provides banking services to individuals and small businesses throughout Northern and Central California.
Why Does WABC Give Us Pause?
- Annual net interest income growth of 6.8% over the last five years was below our standards for the banking sector
- Concessions to defend its market share have ramped up over the last two years as its net interest margin decreased by 46.7 basis points (100 basis points = 1 percentage point)
- Performance over the past two years shows each sale was less profitable as its earnings per share dropped by 12.9% annually, worse than its revenue
Westamerica Bancorporation’s stock price of $47.84 implies a valuation ratio of 1.3x forward P/B. Read our free research report to see why you should think twice about including WABC in your portfolio.
High-Quality Stocks for All Market Conditions
If your portfolio success hinges on just 4 stocks, your wealth is built on fragile ground. You have a small window to secure high-quality assets before the market widens and these prices disappear.
Don’t wait for the next volatility shock. Check out 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 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 Kadant (+351% 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.
