We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Consider 5 Low-Beta Stocks to Endure Market Volatility
Read MoreHide Full Article
It is generally believed that massive returns come only when investors take huge risks. Everybody will agree that taking risks will be beneficial when the market is walking on the bullish path. In other words, investors will reap better returns than the market if the stock is more risky. However, the opposite could also hold true. If the market witnesses a bearish trend, the same stocks will see fall relatively more.
In this article, we will show that developing a portfolio of low risky stocks could also be beneficial if some other parameters are considered.
Beta
Beta measures the volatility or risk of a particular asset in comparison 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 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 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. But 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 one 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 five of the 21 stocks that qualified the screening:
Dean Foods Company – headquartered in Dallas, TX – is primarily involved in processing and distributing milk and related dairy case products in the U.S. Over the last four quarters, the company posted an average positive earnings surprise of 5.44%. For the current year, Dean Foods will likely witness a year-over-year earnings increase of more than 31%.
Electronic Arts Inc. (EA - Free Report) – headquartered in Redwood City, CA – is a developer and publisher of digital interactive entertainment games. The company managed to beat the Zacks Consensus Estimate in each of the last four quarters, with an average beat of 29.89%. Moreover, the company is expected to post year-over-year earnings improvement of 18% for the current year.
TAL Education Group (TAL - Free Report) – headquartered in Beijing – is a provider of tutoring services to K-12 students in subjects like mathematics, physics, chemistry, biology, history, geography, political science, English, and Chinese. For the current year, the company might witness year-over-year earnings improvement of 1%.
Bob Evans Farms, Inc. – based in New Albany, OH – is an owner and operator of full-service restaurants in the U.S. The company was able to surpass the Zacks Consensus Estimate in each of the last four quarters, with an average beat of 14.74%. Moreover, Bob Evans will likely post year-over-year earnings improvement of 11% for the current year.
Tristate Capital Holdings Inc. – headquartered in Pittsburgh, PA – is a provider of commercial and private banking services to middle-market businesses and high-net-worth people in the U.S. Over the last four quarters, the company posted an average positive earnings surprise of 11.13%.
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.
Zacks Restaurant Recommendations:In addition to dining at these special places, you can feast on their stock shares. A Zacks Special Report spotlights 5 recent IPOs to watch plus 2 stocks that offer immediate promise in a booming sector. Download it free »
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Consider 5 Low-Beta Stocks to Endure Market Volatility
It is generally believed that massive returns come only when investors take huge risks. Everybody will agree that taking risks will be beneficial when the market is walking on the bullish path. In other words, investors will reap better returns than the market if the stock is more risky. However, the opposite could also hold true. If the market witnesses a bearish trend, the same stocks will see fall relatively more.
In this article, we will show that developing a portfolio of low risky stocks could also be beneficial if some other parameters are considered.
Beta
Beta measures the volatility or risk of a particular asset in comparison 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 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 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. But 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 one 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 five of the 21 stocks that qualified the screening:
Dean Foods Company – headquartered in Dallas, TX – is primarily involved in processing and distributing milk and related dairy case products in the U.S. Over the last four quarters, the company posted an average positive earnings surprise of 5.44%. For the current year, Dean Foods will likely witness a year-over-year earnings increase of more than 31%.
Electronic Arts Inc. (EA - Free Report) – headquartered in Redwood City, CA – is a developer and publisher of digital interactive entertainment games. The company managed to beat the Zacks Consensus Estimate in each of the last four quarters, with an average beat of 29.89%. Moreover, the company is expected to post year-over-year earnings improvement of 18% for the current year.
TAL Education Group (TAL - Free Report) – headquartered in Beijing – is a provider of tutoring services to K-12 students in subjects like mathematics, physics, chemistry, biology, history, geography, political science, English, and Chinese. For the current year, the company might witness year-over-year earnings improvement of 1%.
Bob Evans Farms, Inc. – based in New Albany, OH – is an owner and operator of full-service restaurants in the U.S. The company was able to surpass the Zacks Consensus Estimate in each of the last four quarters, with an average beat of 14.74%. Moreover, Bob Evans will likely post year-over-year earnings improvement of 11% for the current year.
Tristate Capital Holdings Inc. – headquartered in Pittsburgh, PA – is a provider of commercial and private banking services to middle-market businesses and high-net-worth people in the U.S. Over the last four quarters, the company posted an average positive earnings surprise of 11.13%.
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/.
Zacks Restaurant Recommendations:In addition to dining at these special places, you can feast on their stock shares. A Zacks Special Report spotlights 5 recent IPOs to watch plus 2 stocks that offer immediate promise in a booming sector. Download it free »