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Buy These 4 Low-Beta Stocks to Counter the Choppy Market
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The threat of an invasion of Ukraine has been weighing on stocks, making the market extremely volatile. The possibility of an imminent Russian attack on Ukraine, as expected by the officials of the United States, is among the major headlines concerning investors. Market pundits are anticipating the stock market to continue to remain choppy as the response of the Central bank to tackle inflation and the Ukraine tension is still uncertain.
Hence, creating a portfolio of low-beta stocks is of utmost importance since the securities will deliver healthy returns and provide a shield against volatile market conditions.
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 primary 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 four among the 11 stocks that qualified the screening:
Stride, Inc. (LRN - Free Report) is a leading player in providing highly advanced and tech-enabled education solutions to students. An uptick in revenue per enrollment along with an increase in middle and high school career learning enrollments continue to drive Stride’s strong performance.
For fiscal 2022, Stride is likely to see earnings growth of 40.4%. Stride’s stock has surged 35.6% over the past year versus a 77.2% decline of the composite stocks belonging to the industry.
Euroseas Ltd. (ESEA - Free Report) , being the owner and operator of container vessels, generates stable revenues while providing ocean-going transportation services across the world. The current fleet of Euroseas comprises 16 vessels on the water.
Euroseas’ stock has surged 218.2% over the past year, outpacing the 35.5% rise of the composite stocks belonging to the industry.
Vocera Communications, Inc. is a leading provider of clinical communication and workflow solutions. In order to engage with patients and families and collaborate with co-workers, many hospitals and healthcare facilities have selected Vocera solutions.
Over the past year, Vocera’s stock price has gained 77.9% versus the 10.8% rise of the composite stocks belonging to the industry.
Albertsons Companies, Inc. (ACI - Free Report) is a well-known food and drug retailer. For fiscal 2021, the Zacks Consensus Estimate for Albertsons’ earnings per share has witnessed upward revisions over the past 60 days.
Albertsons’ bottom line is being backed by the acceleration of digital and omni-channel capabilities. Over the past year, ACI’s stock price has gained 75.9% versus the 28.4% decline of the composite stocks belonging to the industry.
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.
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.
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Buy These 4 Low-Beta Stocks to Counter the Choppy Market
The threat of an invasion of Ukraine has been weighing on stocks, making the market extremely volatile. The possibility of an imminent Russian attack on Ukraine, as expected by the officials of the United States, is among the major headlines concerning investors. Market pundits are anticipating the stock market to continue to remain choppy as the response of the Central bank to tackle inflation and the Ukraine tension is still uncertain.
Hence, creating a portfolio of low-beta stocks is of utmost importance since the securities will deliver healthy returns and provide a shield against volatile market conditions.
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 primary 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 four among the 11 stocks that qualified the screening:
Stride, Inc. (LRN - Free Report) is a leading player in providing highly advanced and tech-enabled education solutions to students. An uptick in revenue per enrollment along with an increase in middle and high school career learning enrollments continue to drive Stride’s strong performance.
For fiscal 2022, Stride is likely to see earnings growth of 40.4%. Stride’s stock has surged 35.6% over the past year versus a 77.2% decline of the composite stocks belonging to the industry.
Euroseas Ltd. (ESEA - Free Report) , being the owner and operator of container vessels, generates stable revenues while providing ocean-going transportation services across the world. The current fleet of Euroseas comprises 16 vessels on the water.
Euroseas’ stock has surged 218.2% over the past year, outpacing the 35.5% rise of the composite stocks belonging to the industry.
Vocera Communications, Inc. is a leading provider of clinical communication and workflow solutions. In order to engage with patients and families and collaborate with co-workers, many hospitals and healthcare facilities have selected Vocera solutions.
Over the past year, Vocera’s stock price has gained 77.9% versus the 10.8% rise of the composite stocks belonging to the industry.
Albertsons Companies, Inc. (ACI - Free Report) is a well-known food and drug retailer. For fiscal 2021, the Zacks Consensus Estimate for Albertsons’ earnings per share has witnessed upward revisions over the past 60 days.
Albertsons’ bottom line is being backed by the acceleration of digital and omni-channel capabilities. Over the past year, ACI’s stock price has gained 75.9% versus the 28.4% decline of the composite stocks belonging to the industry.
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.