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Buy These 4 Low-Beta Stocks to Sail Through the Choppy Market
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To combat the broad inflationary pressure, The Federal Reserve will likely keep raising interest rates, making the market extremely volatile. Fears of a recession have added to the concern. 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 Scorpio Tankers Inc. (STNG - Free Report) , eGain Corporation (EGAN - Free Report) ,Ardmore Shipping Corporation (ASC - Free Report) and KnowBe4, Inc. are worth betting on.
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 four stocks among 11 that qualified for the screening:
Scorpio Tankers is expected to generate significant cashflows since the company is the largest product tanker owner in the world. It has a diversified blue-chip customer base, providing services related to the marine transportation of refined petroleum products. For 2022, STNG is likely to see earnings growth of 393.3%.
Ardmore Shipping’s outlook seems bright since the company has set a core strategy of developing a modern, high-quality fleet of products and chemical tankers. The company focuses on building good commercial relationships for the long term. For 2022, ASC will likely see earnings growth of 437.8%.
eGain Corporation is awell-known nameas a provider of a knowledge management platform for customer engagement. eGain is banking on its industry-leading Knowledge Hub, for which inbound interest and market demand remain handsome.
KnowBe4 is well-known name for providing security awareness training and a simulated phishing platform. In the current geopolitical-tension environment, there has been a heightened demand for organizations to establish a strong security culture. In the past 30 days, KnowBe4 witnessed upward earnings estimate revisions for 2022 and 2023.
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 Sail Through the Choppy Market
To combat the broad inflationary pressure, The Federal Reserve will likely keep raising interest rates, making the market extremely volatile. Fears of a recession have added to the concern. 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 Scorpio Tankers Inc. (STNG - Free Report) , eGain Corporation (EGAN - Free Report) , Ardmore Shipping Corporation (ASC - Free Report) and KnowBe4, Inc. are worth betting on.
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 four stocks among 11 that qualified for the screening:
Scorpio Tankers is expected to generate significant cashflows since the company is the largest product tanker owner in the world. It has a diversified blue-chip customer base, providing services related to the marine transportation of refined petroleum products. For 2022, STNG is likely to see earnings growth of 393.3%.
Ardmore Shipping’s outlook seems bright since the company has set a core strategy of developing a modern, high-quality fleet of products and chemical tankers. The company focuses on building good commercial relationships for the long term. For 2022, ASC will likely see earnings growth of 437.8%.
eGain Corporation is awell-known nameas a provider of a knowledge management platform for customer engagement. eGain is banking on its industry-leading Knowledge Hub, for which inbound interest and market demand remain handsome.
KnowBe4 is well-known name for providing security awareness training and a simulated phishing platform. In the current geopolitical-tension environment, there has been a heightened demand for organizations to establish a strong security culture. In the past 30 days, KnowBe4 witnessed upward earnings estimate revisions for 2022 and 2023.
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.