The U.S. presidential elections are less than three months away, and market pundits are already expecting prolonged political uncertainty to stoke stock market gyration in the near term. Typically, the race to White House tightens in the month of September and October, resulting in higher bouts of volatility in the equity market. 

 

In fact, investors and traders this time around are expecting a possible market tumble later this year, as President Trump could delay the election fearing disruption in voting system. Moreover, the lack of clarity in polls so far on a win by a Democrat or Republican is resulting in more speculation.

 

The election worries amplify concerns about an economy that is struggling to emerge from the impact of the coronavirus pandemic. More people are bearish as election uncertainty will occur in the cooler months, which may also bring on more coronavirus-led infections, leading to a possible shut down of the economy. Lest we forget, economic recovery hasn’t gathered pace yet, in fact it has particularly been slow as recently seen in retail sales and jobs data.

 

What’s more, the month of October and November traditionally tend to be the wildest months of the year anyway, and the Cboe Volatility Index (VIX), a measure of expected volatility in the upcoming 30 trading days, has always risen an average of nearly four points the month before the presidential election.

 

Last but not the least, it will be too early to bank on a V-shaped recovery. What’s more, the market can again touch the Mar 23 lows since it is currently driven on sentiment, and any discouraging news on the pandemic might hurt investor confidence.

As Wall Street is likely to grapple with election-led uncertainty in the near term, low-volatility stocks appear as a good bet at the moment. After all, these stocks tend to hold up better in tough times and have done pretty well over longer periods of time. 

 

In order to screen low-volatility stocks or which are inherently less volatile than the markets they trade in, low beta needs to be considered. In this case, a low beta ranges from 0 to 1. By the way, beta is a measure of volatility that shows how closely a stock’s price movement correlates with a benchmark.

 

Further, we have selected such low-beta stocks that flaunt a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

 

Central Garden Pet Company (CENT Quick QuoteCENT - Free Report) produces and distributes products to lawn and garden, and pet supplies markets in the United States. The company has a beta of 0.37. The Zacks Consensus Estimate for its current-year earnings has moved 21.1% north over the past 60 days. The company’s expected earnings growth rate for the current year is 21.9%.

 

The Ensign Group, Inc. (ENSG Quick QuoteENSG - Free Report) provides health care services in the post-acute care continuum and other ancillary businesses. The company has a beta of 0.86. The Zacks Consensus Estimate for its current-year earnings has advanced 13.4% over the past 60 days. The company’s expected earnings growth rate for the current year is 28.6%.

 

LogMeIn, Inc. provides a portfolio of cloud-based communication and collaboration, identity and access, and customer engagement and support solutions. The company has a beta of 0.74. The Zacks Consensus Estimate for its current-year earnings has climbed 19.6% over the past 60 days. The company’s expected earnings growth rate for the current year is 17.3%.

 

Pool Corporation (POOL Quick QuotePOOL - Free Report) distributes swimming pool supplies, equipment, and related leisure products in the United States. The company has a beta of 0.87. The Zacks Consensus Estimate for its current-year earnings has moved up 9.9% over the past 60 days. The company’s expected earnings growth rate for the next quarter and year is 25% and 18.4%, respectively.

 

Turning Point Brands, Inc. (TPB Quick QuoteTPB - Free Report) provides tobacco products in the United States. The company has a beta of 0.86. The Zacks Consensus Estimate for its current-year earnings has risen 31.7% over the past 60 days. The company’s expected earnings growth rate for the current year is 33.9%.

Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.      

 

Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.