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4 Low-Volatility Stocks to Sail Through Market Mayhem

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It has been a topsy-turvy ride for investors, so far in 2015. The year started on a grave note with most of the indices going downhill. While the stock market made a nice comeback in February, it took a sharp plunge in March, June and most recently in August.

Looking at the S&P 500’s performance, we note that the index dropped 3.1% in January, 1.7% in March and 2.1% in June, but gained 5.5% in February – marking its best performance in years. April, May and July were bright spots but the incessant volatility spooked investors.

However, this August has been the worst since May 2012 with the index plummeting 6.3% on the Chinese market rout and uncertainties prevailing over Fed’s rate hike.

Market volatility can be measured through the VOLATILITY S&P 500 (VIX) index – which is primarily a panic indicator for investors. VIX started the year with 17.79 and dipped to a year-to-date low of 11.95 on Jul 17. However, VIX scaled a high of 40.74 on Aug 24 – which marked a critical level for investors.

In this regard, we note that VIX had stooped to this dangerous range during the 2008 financial crisis and also in Aug 2011 when the Congress and President Obama were struggling over the debt-ceiling crisis. As of now, the VIX benchmark is hovering around 30, which raises caution for investors as market participants consider 20 as safe.

We believe that such capriciousness will continue to worry investors in September as well, compelling them to seek stocks that can brace the present market rout. Keeping the present scenario in mind, we believe that it is wise to focus on large-cap stocks that can protect investors against potential risks. At the same time, we look for growth opportunities in these so-called mature stocks.

How to Make the Right Pick

To start with, we used our style score system to trace stocks with a solid growth potential.

Our Growth Style Score condenses all the essential metrics from the company’s financial statements to get a true sense of the quality and sustainability of its growth. Our research shows that stocks with Growth Style Scores of ‘A’ or ‘B’ and a Zacks Rank #1 (Strong Buy) or #2 (Buy) offer the best investment opportunities in the growth investing space.

All the four stocks selected herein flaunt a solid Zacks Rank #1, a Growth Style Score of ‘A’ or ‘B,’ market capitalization of over $10 billion and beta below 1.

A beta below 1 suggests that the price movement of the stock is not highly correlated with the market. Beta is often considered as a useful tool to determine the safety of a portfolio or investment during market volatility. (AMZN - Free Report) – This e-commerce giant is a great pick for investors during these turbulent times. The stock sports a growth style score of ‘A,’ beta of 0.94 and a market cap of $238.79 billion.

To add to the positives, the company has been topping the Zacks Consensus Estimate lately with the last four quarters averaging a hearty 72.9%. The stock has also witnessed a massive 253.5% upward revision in earnings estimates to $1.52 per share for its current year, over the last 60 days.

Gilead Sciences (GILD - Free Report) – This leading biopharmaceutical company sports a growth style score of ‘B’. The stock currently has beta of 0.84 and market cap of $153.03 billion.

Moreover, the company has delivered an average earnings beat of 6.88% over the last four quarters. The stock has seen its current year earnings estimates trend up by 8.6% over the last 60 days to $11.99.

Regeneron Pharmaceuticals (REGN - Free Report) – Another biopharmaceutical company in our list that has a growth style score of ‘B,’ beta of 0.88 and market cap of $53.79 billion. Over the last 60 days, current year earnings estimates for the company surged 23% ($1.83) to $9.61.

Dr. Reddy's Laboratories Ltd (RDY - Free Report) – This India-based integrated global pharmaceutical company has a growth style score of ‘A.’ The stock currently has beta of 0.96 and market cap of $10.99 billion. Over the last 60 days, current year earnings estimates have moved up 5.7% (13 cents) to $2.42.


Although market instability is expected to keep investors on their toes, we believe that these four large-cap stocks are great picks for a winning portfolio.

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