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Buy These 4 Low-Beta Stocks to Counter Market Volatility
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The "fear gauge" on Wall Street has reached a two-month high due to a decline in U.S. stocks. However, encouraging retail sales highlight the economy’s strength. Overall, the market is likely to maintain its volatility, emphasizing the immediate necessity of constructing a portfolio comprising low-beta stocks. These securities are anticipated to generate substantial returns while offering a protective shield against unpredictable market conditions.
In this regard, stocks like Otter Tail Corporation (OTTR - Free Report) , OraSure Technologies Inc. (OSUR - Free Report) , BioMarin Pharmaceutical Inc. (BMRN - Free Report) and Regeneron Pharmaceuticals, Inc. (REGN - Free Report) are worth betting on.
Understanding Beta
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 a 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 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 of the 11 stocks that qualified the screening:
Otter Tail Corporation is a leading player in electric utility and manufacturing businesses. Recovery of rate base investments continues to drive the firm. For 2024, Otter Tail has witnessed upward earnings estimate revisions in the past 60 days.
OraSure Technologies is a leading provider of specimen collection devices, point-of-care and home diagnostic tests. OraSure is focused on key strategic partnerships and internal innovation. OSUR has witnessed upward estimate revisions for its bottom line for 2024 over the past 60 days.
BioMarin Pharmaceutical, a prominent player in the field of biotechnology, specializes in the development of targeted therapies aimed at addressing the underlying causes of genetic conditions. FDA approval for VOXZOGO is a huge success for the company, which, along with other notable developments, will aid the top line.
Regeneron Pharmaceuticals is a prominent biotechnology company. With a robust business model, it engages in the discovery, development and commercialization of life-changing medications. The company is involved in improving its traditional drug development process.
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 Market Volatility
The "fear gauge" on Wall Street has reached a two-month high due to a decline in U.S. stocks. However, encouraging retail sales highlight the economy’s strength. Overall, the market is likely to maintain its volatility, emphasizing the immediate necessity of constructing a portfolio comprising low-beta stocks. These securities are anticipated to generate substantial returns while offering a protective shield against unpredictable market conditions.
In this regard, stocks like Otter Tail Corporation (OTTR - Free Report) , OraSure Technologies Inc. (OSUR - Free Report) , BioMarin Pharmaceutical Inc. (BMRN - Free Report) and Regeneron Pharmaceuticals, Inc. (REGN - Free Report) are worth betting on.
Understanding Beta
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 a 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 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 of the 11 stocks that qualified the screening:
Otter Tail Corporation is a leading player in electric utility and manufacturing businesses. Recovery of rate base investments continues to drive the firm. For 2024, Otter Tail has witnessed upward earnings estimate revisions in the past 60 days.
OraSure Technologies is a leading provider of specimen collection devices, point-of-care and home diagnostic tests. OraSure is focused on key strategic partnerships and internal innovation. OSUR has witnessed upward estimate revisions for its bottom line for 2024 over the past 60 days.
BioMarin Pharmaceutical, a prominent player in the field of biotechnology, specializes in the development of targeted therapies aimed at addressing the underlying causes of genetic conditions. FDA approval for VOXZOGO is a huge success for the company, which, along with other notable developments, will aid the top line.
Regeneron Pharmaceuticals is a prominent biotechnology company. With a robust business model, it engages in the discovery, development and commercialization of life-changing medications. The company is involved in improving its traditional drug development process.
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.