Stability is great, but low-volatility stocks may struggle to deliver market-beating returns over time as they sometimes underperform during bull markets.
Luckily for you, StockStory helps you navigate which companies are truly worth holding. That said, here is one low-volatility stock providing safe-and-steady growth and two that may not keep up.
Two Stocks to Sell:
Arcos Dorados (ARCO)
Rolling One-Year Beta: 0.38
Translating to “Golden Arches” in Spanish, Arcos Dorados (NYSE: ARCO) is the master franchisee of the McDonald's brand in Latin America and the Caribbean, responsible for its operations and growth in over 20 countries.
Why Is ARCO Not Exciting?
- Gross margin of 12.7% reflects the bad unit economics inherent in most restaurant businesses
- Operating margin of 7.3% falls short of the industry average, and the smaller profit dollars make it harder to react to unexpected market developments
- Poor free cash flow margin of -0.7% for the last two years limits its freedom to invest in growth initiatives, execute share buybacks, or pay dividends
Arcos Dorados is trading at $7.73 per share, or 11.6x forward P/E. Dive into our free research report to see why there are better opportunities than ARCO.
Pool (POOL)
Rolling One-Year Beta: 0.53
Founded in 1993 and headquartered in Louisiana, Pool (NASDAQ: POOL) is one of the largest wholesale distributors of swimming pool supplies, equipment, and related leisure products.
Why Do We Avoid POOL?
- Absence of organic revenue growth over the past two years suggests it may have to lean into acquisitions to drive its expansion
- Free cash flow margin is on track to jump by 1.3 percentage points next year, meaning the company will have more resources to pursue growth initiatives, repurchase shares, or pay dividends
- Eroding returns on capital from an already low base indicate that management’s recent investments are destroying value
At $235.70 per share, Pool trades at 20x forward P/E. To fully understand why you should be careful with POOL, check out our full research report (it’s free for active Edge members).
One Stock to Buy:
CLEAR Secure (YOU)
Rolling One-Year Beta: 0.50
Recognized by its signature blue lanes and biometric pods at airport checkpoints across America, CLEAR Secure (NYSE: YOU) provides biometric identity verification technology that allows subscribers to bypass regular security lines at airports and access secure experiences at various venues.
Why Is YOU a Good Business?
- Annual revenue growth of 23.2% over the past two years was outstanding, reflecting market share gains
- Superior software functionality and low servicing costs are reflected in its best-in-class gross margin of 86%
- Disciplined cost controls and effective management resulted in a strong trailing 12-month operating margin of 19.2%, and it turbocharged its profits by achieving some fixed cost leverage
CLEAR Secure’s stock price of $35.25 implies a valuation ratio of 3.4x forward price-to-sales. Is now the time to initiate a position? See for yourself in our comprehensive research report, it’s free for active Edge members .
Stocks We Like Even More
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 Growth Stocks for this month. 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-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.
