
3 Dawdling Stocks with Mounting Challenges
Stability is great, but low-volatility stocks may struggle to deliver market-beating returns over time as they sometimes underperform during bull markets.
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 are three low-volatility stocks to steer clear of and a few better alternatives.
Edgewell Personal Care (EPC)
Rolling One-Year Beta: 0.89
Boasting brands such as Banana Boat, Schick, and Skintimate, Edgewell Personal Care (NYSE:EPC) sells personal care products in the skin and sun care, shave, and feminine care categories.
Why Do We Avoid EPC?
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Organic sales performance over the past two years indicates the company may need to make strategic adjustments or rely on M&A to catalyze faster growth
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Sales are projected to remain flat over the next 12 months as demand decelerates from its three-year trend
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Free cash flow margin dropped by 2.7 percentage points over the last year, implying the company became more capital intensive as competition picked up
At $30.20 per share, Edgewell Personal Care trades at 9.3x forward price-to-earnings. Read our free research report to see why you should think twice about including EPC in your portfolio, it’s free .
Wyndham (WH)
Rolling One-Year Beta: 0.91
Established in 1981, Wyndham (NYSE:WH) is a global hotel franchising company with over 9,000 hotels across nearly 95 countries on six continents.
Why Does WH Fall Short?
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Revenue per room has underperformed over the past two years, suggesting it may need to develop new facilities
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Projected sales growth of 6% for the next 12 months suggests sluggish demand
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Underwhelming 9.4% return on capital reflects management’s difficulties in finding profitable growth opportunities
Wyndham is trading at $83.20 per share, or 17.5x forward price-to-earnings. To fully understand why you should be careful with WH, check out our full research report (it’s free) .
Graphic Packaging Holding (GPK)
Rolling One-Year Beta: 0.76
Founded in 1991, Graphic Packaging (NYSE:GPK) is a provider of paper-based packaging solutions for a wide range of products.
Why Should You Dump GPK?
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Declining unit sales over the past two years show it’s struggled to increase its sales volumes and had to rely on price increases
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Forecasted revenue decline of 1.7% for the upcoming 12 months implies demand will fall even further
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Free cash flow margin shrank by 7.1 percentage points over the last five years, suggesting the company is consuming more capital to stay competitive
Graphic Packaging Holding’s stock price of $25.91 implies a valuation ratio of 9.4x forward price-to-earnings. Check out our free in-depth research report to learn more about why GPK doesn’t pass our bar .