Broad inflationary pressures and rising coronavirus infections overseas are making the broader market extremely volatile. Hence, creating a portfolio of low-beta stocks is of utmost importance since the securities will deliver healthy returns and shield against volatile market conditions. In this regard, stocks like Mercury General Corporation (MCY - Free Report) , Employers Holdings, Inc. (EIG - Free Report) , AeroVironment Inc. (AVAV - Free Report) and Lamb Weston Holdings Inc (LW - Free Report) are worth betting on now.
Beta Understanding
Beta measures the volatility or risk of a particular asset compared to the market. In other words, beta measures the extent of a security’s price movement relative to the market. In this article, we are considering the S&P 500 as the market.
If a stock has a beta of 1, then the price of the stock will move with the market. So, the stock is more volatile than the market if its beta is more than 1. In the same way, the stock is not as volatile as the market if its beta is less than 1.
For example, if the market offers a return of 20%, a stock with a beta of 3 will return 60%, which is overwhelming. Similarly, when the market slips 20%, the stock will sink 60%, which is devastating.
Screening Criteria:
We have taken beta between 0 and 0.6 as our prime criterion for screening stocks that are less volatile than the market. However, this should not be the only factor to be considered while selecting a winning strategy. We need to take into account other parameters as well that can add value to the portfolio.
Percentage Change in Price in the Last 4 Weeks Greater Than Zero: This ensures that the stocks saw positive price movement over the last month.
Average 20-Day Volume Greater Than 50,000: A substantial trading volume ensures that the stocks are easily tradable.
Price Greater Than or Equal to $5: They must all be trading at a minimum of $5 or higher.
Zacks Rank Equal to 1: Zacks Rank #1 (Strong Buy) stocks indicate that they will significantly outperform the broader U.S. equity market over the next one to three months. You can see the complete list of today’s Zacks #1 Rank stocks here.
Here are three stocks among 14 that qualified the screening:
Mercury General Corporation writes personal automobile insurance in the domestic market. Over the past 30 days, MCY has witnessed upward bottom-line estimate revisions for 2022 and 2023.
Based in Reno, NV, Employers Holdings, Inc. is primarily involved in the commercial property and casualty insurance industry. Over the past 30 days, EIG has witnessed upward earnings estimate revisions for 2022 and 2023.
Headquartered in Simi Valley, CA, AeroVironment is a well-known name in manufacturing unmanned aircraft systems and tactical missile systems. For fiscal 2023 and 2024, the stock is likely to see earnings growth of 30.4% and 61%, respectively.
Lamb Weston Holdings Inc is a well-known firm supplying sweet potato, frozen potato, vegetable products and appetizers to restaurants and retailers across the globe. For fiscal 2023 and 2024, Lamb Weston is likely to see earnings growth of 45.7% and 28.5%, respectively.
You can get the rest of the stocks on this list by signing up now for your 2-week free trial to the Research Wizard and start using this screen in your own trading. Further, you can also create your own strategies and test them first before taking the investment plunge.
The Research Wizard is a great place to begin. It's easy to use. Everything is in plain language. And it's very intuitive. Start your Research Wizard trial today. And the next time you read an economic report, open up the Research Wizard, plug your finds in, and see what gems come out.
Click here to sign up for a free trial to the Research Wizard today.
Disclosure: Officers, directors and/or employees of Zacks Investment Research may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material. An affiliated investment advisory firm may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material.
Disclosure: Performance information for Zacks’ portfolios and strategies are available at: https://www.zacks.com/performance.
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
Broad inflationary pressures and rising coronavirus infections overseas are making the broader market extremely volatile. Hence, creating a portfolio of low-beta stocks is of utmost importance since the securities will deliver healthy returns and shield against volatile market conditions. In this regard, stocks like Mercury General Corporation (MCY - Free Report) , Employers Holdings, Inc. (EIG - Free Report) , AeroVironment Inc. (AVAV - Free Report) and Lamb Weston Holdings Inc (LW - Free Report) are worth betting on now.
Beta Understanding
Beta measures the volatility or risk of a particular asset compared to the market. In other words, beta measures the extent of a security’s price movement relative to the market. In this article, we are considering the S&P 500 as the market.
If a stock has a beta of 1, then the price of the stock will move with the market. So, the stock is more volatile than the market if its beta is more than 1. In the same way, the stock is not as volatile as the market if its beta is less than 1.
For example, if the market offers a return of 20%, a stock with a beta of 3 will return 60%, which is overwhelming. Similarly, when the market slips 20%, the stock will sink 60%, which is devastating.
Screening Criteria:
We have taken beta between 0 and 0.6 as our prime criterion for screening stocks that are less volatile than the market. However, this should not be the only factor to be considered while selecting a winning strategy. We need to take into account other parameters as well that can add value to the portfolio.
Percentage Change in Price in the Last 4 Weeks Greater Than Zero: This ensures that the stocks saw positive price movement over the last month.
Average 20-Day Volume Greater Than 50,000: A substantial trading volume ensures that the stocks are easily tradable.
Price Greater Than or Equal to $5: They must all be trading at a minimum of $5 or higher.
Zacks Rank Equal to 1: Zacks Rank #1 (Strong Buy) stocks indicate that they will significantly outperform the broader U.S. equity market over the next one to three months. You can see the complete list of today’s Zacks #1 Rank stocks here.
Here are three stocks among 14 that qualified the screening:
Mercury General Corporation writes personal automobile insurance in the domestic market. Over the past 30 days, MCY has witnessed upward bottom-line estimate revisions for 2022 and 2023.
Based in Reno, NV, Employers Holdings, Inc. is primarily involved in the commercial property and casualty insurance industry. Over the past 30 days, EIG has witnessed upward earnings estimate revisions for 2022 and 2023.
Headquartered in Simi Valley, CA, AeroVironment is a well-known name in manufacturing unmanned aircraft systems and tactical missile systems. For fiscal 2023 and 2024, the stock is likely to see earnings growth of 30.4% and 61%, respectively.
Lamb Weston Holdings Inc is a well-known firm supplying sweet potato, frozen potato, vegetable products and appetizers to restaurants and retailers across the globe. For fiscal 2023 and 2024, Lamb Weston is likely to see earnings growth of 45.7% and 28.5%, respectively.
You can get the rest of the stocks on this list by signing up now for your 2-week free trial to the Research Wizard and start using this screen in your own trading. Further, you can also create your own strategies and test them first before taking the investment plunge.
The Research Wizard is a great place to begin. It's easy to use. Everything is in plain language. And it's very intuitive. Start your Research Wizard trial today. And the next time you read an economic report, open up the Research Wizard, plug your finds in, and see what gems come out.
Click here to sign up for a free trial to the Research Wizard today.
Disclosure: Officers, directors and/or employees of Zacks Investment Research may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material. An affiliated investment advisory firm may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material.
Disclosure: Performance information for Zacks’ portfolios and strategies are available at: https://www.zacks.com/performance.
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
Get the latest research report on EIG - FREE
Get the latest research report on AVAV - FREE
Get the latest research report on MCY - FREE
Get the latest research report on LW - FREE