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 is one low-volatility stock that could succeed under all market conditions and two that may not keep up.
Two Stocks to Sell:
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 Should You Dump CNXN?
- Flat sales over the last two years suggest it must find different ways to grow during this cycle
- Earnings growth underperformed the sector average over the last two years as its EPS grew by just 4.5% annually
- Poor free cash flow margin of 3.1% for the last five years limits its freedom to invest in growth initiatives, execute share buybacks, or pay dividends
Connection is trading at $59.96 per share, or 15.7x forward P/E. Check out our free in-depth research report to learn more about why CNXN doesn’t pass our bar.
Franklin BSP Realty Trust (FBRT)
Rolling One-Year Beta: 0.40
Operating as a specialized real estate investment trust (REIT) with roots dating back to 2012, Franklin BSP Realty Trust (NYSE: FBRT) originates and manages a diversified portfolio of commercial real estate debt investments secured by properties in the United States and abroad.
Why Should You Sell FBRT?
- Net interest income trends were unexciting over the last five years as its 4.4% annual growth was below the typical banking firm
- Incremental sales over the last two years were much less profitable as its earnings per share fell by 39.7% annually while its revenue grew
- Annual tangible book value per share declines of 6.8% for the past five years show its capital management struggled during this cycle
At $10.69 per share, Franklin BSP Realty Trust trades at 0.7x forward P/B. If you’re considering FBRT for your portfolio, see our FREE research report to learn more.
One Stock to Watch:
Tetra Tech (TTEK)
Rolling One-Year Beta: 0.26
With a 50-year legacy of "Leading with Science" and operations on all seven continents, Tetra Tech (NASDAQ: TTEK) provides high-end consulting and engineering services focused on water management, environmental solutions, and sustainable infrastructure for government and commercial clients worldwide.
Why Do We Like TTEK?
- Annual revenue growth of 15.8% over the last two years was superb and indicates its market share increased during this cycle
- Average backlog growth of 10.2% over the past two years shows it has a steady sales pipeline that will drive future orders
- Impressive free cash flow profitability enables the company to fund new investments or reward investors with share buybacks/dividends
Tetra Tech’s stock price of $32.18 implies a valuation ratio of 22.5x forward P/E. Is now a good time to buy? Find out in our full research report, it’s free for active Edge members.
Stocks We Like Even More
Donald Trump’s April 2025 "Liberation Day" tariffs sent markets into a tailspin, but stocks have since rebounded strongly, proving that knee-jerk reactions often create the best buying opportunities.
The smart money is already positioning for the next leg up. Don’t miss out on the recovery - check out 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 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 Comfort Systems (+782% 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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