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Stocks closed marginally lower on Wednesday after opinion polls suggested that it was difficult to determine which way the referendum over Brexit would go. With only hours to go for the results, market watchers believe that a vote in favor of Britain exiting the E.U. would result in major losses.
At this point, you would be better off by adding safe stocks to your portfolio. This is why picking value stocks that have a low beta might be a prudent option. Beta measures the tendency of a stock's returns to respond to market swings. Low correlation stocks provide protection during turbulent times as they are less prone to day-to-day fluctuations.
Economic Losses for Britain
Several economists, market watchers and major investors have issued warnings over the economic impact of a vote in favor of “Leave” on the United Kingdom. The latest major figure to speak out about the detrimental economic impact of Britain leaving the E.U. has been billionaire investor George Soros.
A plummeting pound, a decline in household income an even a recession could be in store for the U.K. if citizens voted in favor of a Brexit, according to Soros (read: 4 Stocks That Will Fall if Soros is Right About Brexit).
Larger British companies have also opposed the idea of a break with the E.U. Most of their arguments are centered on the fact that Britain’s imports from the economic zone exceed exports (read: 5 British Stocks to Watch as Brexit Vote Looms). This is why they argue that a decline in the pound in the event of a Brexit could have disastrous effects on the economy.
Global Impact Likely
However, the impact of a Brexit is unlikely to remain insulated to Britain. It is nearly certain that the undeniable and immediate fallout would include a plunge in the value of the pound. This would lead to a flight toward safe haven currencies like the yen and of course the dollar.
A stronger dollar would create multiple challenges for a Federal Reserve which has just wound up a program of monetary easing and is looking for opportunities to raise rates. In Japan’s case, negative rates are already in place and further reductions are highly unlikely.
EU Project under Threat
The not so obvious impact of a Brexit would be similar demands from other member nations (read: 5 Stocks to Combat Brexit Fears). Voices from the likes of the Netherlands, France and Italy are already calling for a break with the E.U. And a Brexit could provide them with the perfect opportunity to undertake such an exercise.
Further uncertainty could then be in store for the economic bloc. Naturally, the euro also stands to lose from the events that could follow. Misgivings already exist about the reforms demanded by the ECB in exchange for financial aid. This is particularly true for countries like Spain, Italy and Greece. More immediately, they will be confronted with a flatter yield curve, making debt servicing extremely tough.
Our Choices
Whichever way the referendum goes, a significant amount of uncertainty has been created for the event. Markets will breathe a sigh of relief if the “Remain” camp wins. However, the global economy will still face a number of challenges.
This is why it would be better to pick safer bets at this point. In such a situation, picking value stocks with low beta would be a good option. Our selection is also backed by a good Zacks Value Score and Zacks Rank.
We narrowed down our choices with the help of our new style score system.
Our research shows that stocks with a Value Style Score of ‘A’ or ‘B’ when combined with a Zacks Rank #1 (Strong Buy) or Zacks Rank #2 (Buy) offer the best investment opportunities in the value investing space.
Nippon Telegraph and Telephone Corporation provides a variety of telecommunications services within Japan and other countries.
Nippon Telegraph and Telephone holds a Zacks Rank #2 (Buy) and has a Value Style Score of ‘A’. The stock has a beta value of 0.13.
Wal-Mart Stores Inc. (WMT - Free Report) operates retail stores in various formats across the world.
Wal-Mart holds a Zacks Rank #2 and has a Value Style Score of ‘A’. The stock has a beta value of 0.23.
Takeda Pharmaceutical Company Limited operates as a research-based pharmaceutical company, engaged in manufacturing, marketing, and selling pharmaceutical products.
Takeda Pharmaceutical holds a Zacks Rank #1 (Strong Buy) and has a Value Style Score of ‘B’. The stock has a beta value of 0.25.
DTE Energy Company (DTE - Free Report) is a holding company with subsidiaries engaged in regulated and unregulated energy businesses.
DTE Energy holds a Zacks Rank #2 and has a Value Style Score of ‘B’. The stock has a beta value of 0.28.
Tyson Foods, Inc. (TSN - Free Report) produces, distributes and markets chicken, beef, pork, prepared foods and allied products.
Tyson Foods holds a Zacks Rank #2 and has a Value Style Score of ‘A’. The stock has a beta value of 0.30.
National Grid plc (NGG - Free Report) is an international energy delivery business, whose principal activities are in the regulated electricity and gas industries.
National Grid holds a Zacks Rank #2 and has a Value Style Score of ‘B’. The stock has a beta value of 0.37.
Kirin Holdings Company, Limited (KNBWY - Free Report) is engaged in the manufacture and sale of alcohol beverages and soft drinks.
Kirin Holdings holds a Zacks Rank #2 and has a Value Style Score of ‘B’. The stock has a beta value of 0.57.
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7 Ultra Safe Stocks to Wait Out Brexit Results
Stocks closed marginally lower on Wednesday after opinion polls suggested that it was difficult to determine which way the referendum over Brexit would go. With only hours to go for the results, market watchers believe that a vote in favor of Britain exiting the E.U. would result in major losses.
At this point, you would be better off by adding safe stocks to your portfolio. This is why picking value stocks that have a low beta might be a prudent option. Beta measures the tendency of a stock's returns to respond to market swings. Low correlation stocks provide protection during turbulent times as they are less prone to day-to-day fluctuations.
Economic Losses for Britain
Several economists, market watchers and major investors have issued warnings over the economic impact of a vote in favor of “Leave” on the United Kingdom. The latest major figure to speak out about the detrimental economic impact of Britain leaving the E.U. has been billionaire investor George Soros.
A plummeting pound, a decline in household income an even a recession could be in store for the U.K. if citizens voted in favor of a Brexit, according to Soros (read: 4 Stocks That Will Fall if Soros is Right About Brexit).
Larger British companies have also opposed the idea of a break with the E.U. Most of their arguments are centered on the fact that Britain’s imports from the economic zone exceed exports (read: 5 British Stocks to Watch as Brexit Vote Looms). This is why they argue that a decline in the pound in the event of a Brexit could have disastrous effects on the economy.
Global Impact Likely
However, the impact of a Brexit is unlikely to remain insulated to Britain. It is nearly certain that the undeniable and immediate fallout would include a plunge in the value of the pound. This would lead to a flight toward safe haven currencies like the yen and of course the dollar.
A stronger dollar would create multiple challenges for a Federal Reserve which has just wound up a program of monetary easing and is looking for opportunities to raise rates. In Japan’s case, negative rates are already in place and further reductions are highly unlikely.
EU Project under Threat
The not so obvious impact of a Brexit would be similar demands from other member nations (read: 5 Stocks to Combat Brexit Fears). Voices from the likes of the Netherlands, France and Italy are already calling for a break with the E.U. And a Brexit could provide them with the perfect opportunity to undertake such an exercise.
Further uncertainty could then be in store for the economic bloc. Naturally, the euro also stands to lose from the events that could follow. Misgivings already exist about the reforms demanded by the ECB in exchange for financial aid. This is particularly true for countries like Spain, Italy and Greece. More immediately, they will be confronted with a flatter yield curve, making debt servicing extremely tough.
Our Choices
Whichever way the referendum goes, a significant amount of uncertainty has been created for the event. Markets will breathe a sigh of relief if the “Remain” camp wins. However, the global economy will still face a number of challenges.
This is why it would be better to pick safer bets at this point. In such a situation, picking value stocks with low beta would be a good option. Our selection is also backed by a good Zacks Value Score and Zacks Rank.
We narrowed down our choices with the help of our new style score system.
Our research shows that stocks with a Value Style Score of ‘A’ or ‘B’ when combined with a Zacks Rank #1 (Strong Buy) or Zacks Rank #2 (Buy) offer the best investment opportunities in the value investing space.
Nippon Telegraph and Telephone Corporation provides a variety of telecommunications services within Japan and other countries.
Nippon Telegraph and Telephone holds a Zacks Rank #2 (Buy) and has a Value Style Score of ‘A’. The stock has a beta value of 0.13.
Wal-Mart Stores Inc. (WMT - Free Report) operates retail stores in various formats across the world.
Wal-Mart holds a Zacks Rank #2 and has a Value Style Score of ‘A’. The stock has a beta value of 0.23.
Takeda Pharmaceutical Company Limited operates as a research-based pharmaceutical company, engaged in manufacturing, marketing, and selling pharmaceutical products.
Takeda Pharmaceutical holds a Zacks Rank #1 (Strong Buy) and has a Value Style Score of ‘B’. The stock has a beta value of 0.25.
DTE Energy Company (DTE - Free Report) is a holding company with subsidiaries engaged in regulated and unregulated energy businesses.
DTE Energy holds a Zacks Rank #2 and has a Value Style Score of ‘B’. The stock has a beta value of 0.28.
Tyson Foods, Inc. (TSN - Free Report) produces, distributes and markets chicken, beef, pork, prepared foods and allied products.
Tyson Foods holds a Zacks Rank #2 and has a Value Style Score of ‘A’. The stock has a beta value of 0.30.
National Grid plc (NGG - Free Report) is an international energy delivery business, whose principal activities are in the regulated electricity and gas industries.
National Grid holds a Zacks Rank #2 and has a Value Style Score of ‘B’. The stock has a beta value of 0.37.
Kirin Holdings Company, Limited (KNBWY - Free Report) is engaged in the manufacture and sale of alcohol beverages and soft drinks.
Kirin Holdings holds a Zacks Rank #2 and has a Value Style Score of ‘B’. The stock has a beta value of 0.57.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>