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. That said, here are three low-volatility stocks to steer clear of and a few better alternatives.

BlackLine (BL)

Rolling One-Year Beta: 0.90

Started in 2001 by software engineer Therese Tucker, one of the very few women founders who took their companies public, BlackLine (NASDAQ: BL) provides software for organizations to automate accounting and finance tasks.

Why Does BL Fall Short?

1. Customers had second thoughts about committing to its platform over the last year as its average billings growth of 7.4% underwhelmed
2. Estimated sales growth of 7.5% for the next 12 months implies demand will slow from its three-year trend
3. Day-to-day expenses have swelled relative to revenue over the last year as its operating margin fell by 2.1 percentage points

BlackLine is trading at $56.01 per share, or 5.1x forward price-to-sales. To fully understand why you should be careful with BL, check out our full research report (it’s free).

Select Medical (SEM)

Rolling One-Year Beta: 0.64

With a nationwide network spanning 46 states and over 2,700 healthcare facilities, Select Medical (NYSE: SEM) operates critical illness recovery hospitals, rehabilitation hospitals, outpatient rehabilitation clinics, and occupational health centers across the United States.

Why Do We Pass on SEM?

1. Declining admissions over the past two years imply it may need to invest in improvements to get back on track
2. Sales are expected to decline once again over the next 12 months as it continues working through a challenging demand environment
3. Free cash flow margin dropped by 13.2 percentage points over the last five years, implying the company became more capital intensive as competition picked up

At $14.61 per share, Select Medical trades at 12.5x forward P/E. Dive into our free research report to see why there are better opportunities than SEM.

Insperity (NSP)

Rolling One-Year Beta: 0.83

Pioneering the professional employer organization (PEO) industry it helped establish, Insperity (NYSE: NSP) provides human resources outsourcing services to small and medium-sized businesses, handling payroll, benefits, compliance, and HR administration.

Why Does NSP Give Us Pause?

1. Annual revenue growth of 4.1% over the last two years was below our standards for the business services sector
2. Incremental sales over the last five years were much less profitable as its earnings per share fell by 7.8% annually while its revenue grew
3. Free cash flow margin shrank by 5.2 percentage points over the last five years, suggesting the company is consuming more capital to stay competitive

Insperity’s stock price of $60.49 implies a valuation ratio of 16.4x forward P/E. Check out our free in-depth research report to learn more about why NSP doesn’t pass our bar.

Stocks We Like 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 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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