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The outcome of the Fed meeting and Bank of Japan's stance on its monetary policy are expected to flare up volatility. Add to this a possible exit of the U.K. from the European Union and we all know why investors are so edgy.
Amid this uncertainty, it will be a prudent decision to stay invested in fundamentally sound companies that are unperturbed by market gyrations. It’s even better if such companies are undervalued since they will gain strength once the broader market moves north.
Fed Rate Hike Uncertainty
Investors are concerned about the Fed’s stance on interest rates, even though the latest polls point to feeble chances of a hike. Fed futures data indicates no chance of a rate hike on Wednesday, down from a 24% likelihood at the end of May.
Concerns over the May jobs report and “Brexit” significantly lowered the rate hike possibility in this meeting. The U.S. economy added just 38,000 jobs in May, marking the weakest level of hiring in almost six years, according to the Labor department. The pace of hiring also slowed down to an average 116,000 in the past three months.
The jobless rate, on the other hand, fell to 4.7% last month, reflecting its lowest level since Nov 2007. But the drop was mostly due to the number of people dropping out of the labor force and who were therefore counted as unemployed. Now this isn’t a promising sign. Moreover, a dismal jobs report points to weakness in the economy. This is bound to have a repercussion on consumer confidence and might hamper spending levels that have been the bright spots in the U.S. recovery.
BOJ to Spur Instability
Foreign investors are pulling money out of Japanese stocks as they doubt “Abenomics”. Despite more than three years of monetary stimulus, Japan failed to come out of its two-decade long of economic stagnation. Foreign investors sold about 4.5 trillion yen in Japanese cash equities from January through May. Weak external trade and listless consumption added to the anguish.
All eyes are now on BOJ’s two-day monetary policy meeting that is scheduled to start today. As a reminder, volatility had spiked at the beginning of the year, when the BOJ surprisingly adopted negative interest rates to beat deflation.
“Brexit” Rises Panic
On Jun 23, Britain will vote whether or not to remain in the European Union. Anxiety over a possible exit of the U.K. from the European Union has heightened volatility in the markets. In fact, the risk of a so-called “Brexit” has intensified after fresh polls. Last weekend, a poll by Opinium showed that 52% Brits prefer to leave the world’s biggest single market, while 33% are in favor of not leaving. Another poll by the Independent showed that 55% of those surveyed believe Britain should leave the European Union, while 45% want to stay in.
On Sunday, British Prime Minister David Cameron in an interview with the Observer cautioned that a potential Brexit will affect Britain’s spending on healthcare. He cited a research by the Institute of Fiscal Studies and the National Institute for Economic and Social Policy to back his apprehensions. He forewarned that a Brexit will dry up around 40 billion pounds in U.K. public finances by 2020.
Beat Volatility with Undervalued Stocks
Uncertainty is brewing in the U.S. and across the pond. Clearly, even the other markets are not being spared. It’s best to invest in undervalued stocks should the market stumble and fall ahead.
Using our new style score system, one can locate stocks that are undervalued. Our Value Style Score separates the wheat from the chaff by using multiple criteria to find the most attractive value stocks. Our research shows that stocks with a Value Style Score of ‘A’ when combined with a Zacks Rank #1 (Strong Buy) or 2 (Buy) offer the best investment opportunities.
That’s not all. With the help of our proprietary screening methodology, we have sorted five stocks that not only fit the above criteria, but also have an attractive share price of less than $10 and market capitalization of over $100 million.
CVR Refining LP : Sugar Land, TX-based CVR Refining with market capitalization of $1.3 billion is engaged in the refining business of crude oil. The partnership also markets those transported fuels in the U.S. CVR Refining is braced with a Zacks Rank #1. The partnership closed at $8.80 yesterday.
Mobile TeleSystems PJSC : Located in Moscow, Mobile TeleSystems is primarily involved in providing services like telecommunication in Russia. The company closed at $8.82 yesterday and sports a Zacks Rank #1. The market capitalization of the company now stands at $8.8 billion.
Points International Ltd. : Based in Toronto, Canada, Points International – with market capitalization of $143.2 million – is engaged in providing services related to e-commerce and technology to global loyalty program operators. Points International currently carries a Zacks Rank #2. The company closed at $9.46 yesterday.
Manning & Napier Inc. : Chicago, IL-based Manning & Napier is an investment management firm that provides services to high net worth customers. The company – which closed at $8.48 yesterday – has a market capitalization of $127.5 million has a Zacks Rank #2.
KVH Industries Inc. (KVHI - Free Report) : Middletown, RI-based KVH Industries is a leading provider of in-motion satellite TV and communication systems. The company closed at $8.04 yesterday and has a market capitalization of $132.7 million. It currently carries a Zacks Rank #2.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>
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5 Value Stocks to Buy for Less Than $10/share
The outcome of the Fed meeting and Bank of Japan's stance on its monetary policy are expected to flare up volatility. Add to this a possible exit of the U.K. from the European Union and we all know why investors are so edgy.
Amid this uncertainty, it will be a prudent decision to stay invested in fundamentally sound companies that are unperturbed by market gyrations. It’s even better if such companies are undervalued since they will gain strength once the broader market moves north.
Fed Rate Hike Uncertainty
Investors are concerned about the Fed’s stance on interest rates, even though the latest polls point to feeble chances of a hike. Fed futures data indicates no chance of a rate hike on Wednesday, down from a 24% likelihood at the end of May.
Concerns over the May jobs report and “Brexit” significantly lowered the rate hike possibility in this meeting. The U.S. economy added just 38,000 jobs in May, marking the weakest level of hiring in almost six years, according to the Labor department. The pace of hiring also slowed down to an average 116,000 in the past three months.
The jobless rate, on the other hand, fell to 4.7% last month, reflecting its lowest level since Nov 2007. But the drop was mostly due to the number of people dropping out of the labor force and who were therefore counted as unemployed. Now this isn’t a promising sign. Moreover, a dismal jobs report points to weakness in the economy. This is bound to have a repercussion on consumer confidence and might hamper spending levels that have been the bright spots in the U.S. recovery.
BOJ to Spur Instability
Foreign investors are pulling money out of Japanese stocks as they doubt “Abenomics”. Despite more than three years of monetary stimulus, Japan failed to come out of its two-decade long of economic stagnation. Foreign investors sold about 4.5 trillion yen in Japanese cash equities from January through May. Weak external trade and listless consumption added to the anguish.
All eyes are now on BOJ’s two-day monetary policy meeting that is scheduled to start today. As a reminder, volatility had spiked at the beginning of the year, when the BOJ surprisingly adopted negative interest rates to beat deflation.
“Brexit” Rises Panic
On Jun 23, Britain will vote whether or not to remain in the European Union. Anxiety over a possible exit of the U.K. from the European Union has heightened volatility in the markets. In fact, the risk of a so-called “Brexit” has intensified after fresh polls. Last weekend, a poll by Opinium showed that 52% Brits prefer to leave the world’s biggest single market, while 33% are in favor of not leaving. Another poll by the Independent showed that 55% of those surveyed believe Britain should leave the European Union, while 45% want to stay in.
On Sunday, British Prime Minister David Cameron in an interview with the Observer cautioned that a potential Brexit will affect Britain’s spending on healthcare. He cited a research by the Institute of Fiscal Studies and the National Institute for Economic and Social Policy to back his apprehensions. He forewarned that a Brexit will dry up around 40 billion pounds in U.K. public finances by 2020.
Beat Volatility with Undervalued Stocks
Uncertainty is brewing in the U.S. and across the pond. Clearly, even the other markets are not being spared. It’s best to invest in undervalued stocks should the market stumble and fall ahead.
Using our new style score system, one can locate stocks that are undervalued. Our Value Style Score separates the wheat from the chaff by using multiple criteria to find the most attractive value stocks. Our research shows that stocks with a Value Style Score of ‘A’ when combined with a Zacks Rank #1 (Strong Buy) or 2 (Buy) offer the best investment opportunities.
That’s not all. With the help of our proprietary screening methodology, we have sorted five stocks that not only fit the above criteria, but also have an attractive share price of less than $10 and market capitalization of over $100 million.
CVR Refining LP : Sugar Land, TX-based CVR Refining with market capitalization of $1.3 billion is engaged in the refining business of crude oil. The partnership also markets those transported fuels in the U.S. CVR Refining is braced with a Zacks Rank #1. The partnership closed at $8.80 yesterday.
Mobile TeleSystems PJSC : Located in Moscow, Mobile TeleSystems is primarily involved in providing services like telecommunication in Russia. The company closed at $8.82 yesterday and sports a Zacks Rank #1. The market capitalization of the company now stands at $8.8 billion.
Points International Ltd. : Based in Toronto, Canada, Points International – with market capitalization of $143.2 million – is engaged in providing services related to e-commerce and technology to global loyalty program operators. Points International currently carries a Zacks Rank #2. The company closed at $9.46 yesterday.
Manning & Napier Inc. : Chicago, IL-based Manning & Napier is an investment management firm that provides services to high net worth customers. The company – which closed at $8.48 yesterday – has a market capitalization of $127.5 million has a Zacks Rank #2.
KVH Industries Inc. (KVHI - Free Report) : Middletown, RI-based KVH Industries is a leading provider of in-motion satellite TV and communication systems. The company closed at $8.04 yesterday and has a market capitalization of $132.7 million. It currently carries a Zacks Rank #2.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>