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Bet On 4 Low-Beta Stocks BWB, LRN, MASS & PM Despite Tariff Truce
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Although the recent 90-day pause in the U.S.-China trade conflict is cheering the market, it does not provide complete relief. The market will remain highly volatile without a comprehensive trade agreement and greater clarity on broader economic policy.
In this context, creating a curated portfolio of low-beta stocks is a prudent strategy. This provides a safeguard against the uncertain market, equipping investors to navigate volatility with greater resilience and foresight.
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 Using Research Wizard:
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 18 stocks that qualified for the screening:
Bridgewater Bancshares
Attractive loan rates and well-managed deposit costs are helping Bridgewater Bancshares grow its lending and deposit businesses. Handsome loan demand, especially in affordable housing, is reflecting a lucrative business environment for Bridgewater Bancshares. Notably, the company is keeping problem loans low while managing risks carefully. Also, to reward shareholders, BWB is buying back its shares.
Stride
Stride maintains a stable business model by revolutionizing the educational experiences of individuals through the utilization of innovative, high-quality and technology-enabled educational solutions. LRN is well-positioned for long-term success, backed by increasing demand for school choice, innovative offerings, such as nationwide K–12 tutoring, and a focused growth strategy.
908 Devices
908 Devices is sharpening its focus by divesting a less profitable business and concentrating all its energy on handheld devices used in combating drug threats, chemical exposures and border security. Its sales are accelerating rapidly, with an increase in devices sold and the addition of new products, including those now utilized by governments in Europe. With more cash in hand, a robust product lineup and significant market opportunities ahead, it aims to achieve profitability soon and grow even faster by 2026.
Philip Morris
From a traditional cigarette company, Philip Morris is gradually transforming into a smoke-free player as represented by IQOS heated tobacco and ZYN nicotine pouches that are gradually becoming the company’s major focus area. Philip Morris is also strongly focused on rewarding shareholders and on cost cutting initiatives.
You can get the rest of the stocks on this list by signing up now for your two-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.
Image: Bigstock
Bet On 4 Low-Beta Stocks BWB, LRN, MASS & PM Despite Tariff Truce
Although the recent 90-day pause in the U.S.-China trade conflict is cheering the market, it does not provide complete relief. The market will remain highly volatile without a comprehensive trade agreement and greater clarity on broader economic policy.
In this context, creating a curated portfolio of low-beta stocks is a prudent strategy. This provides a safeguard against the uncertain market, equipping investors to navigate volatility with greater resilience and foresight.
Hence, stocks like Bridgewater Bancshares, Inc. (BWB - Free Report) , Stride Inc. (LRN - Free Report) , 908 Devices Inc. (MASS - Free Report) and Philip Morris International Inc. (PM - Free Report) are worth betting on.
What Does Beta of a Stock Measure?
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 Using Research Wizard:
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 18 stocks that qualified for the screening:
Bridgewater Bancshares
Attractive loan rates and well-managed deposit costs are helping Bridgewater Bancshares grow its lending and deposit businesses. Handsome loan demand, especially in affordable housing, is reflecting a lucrative business environment for Bridgewater Bancshares. Notably, the company is keeping problem loans low while managing risks carefully. Also, to reward shareholders, BWB is buying back its shares.
Stride
Stride maintains a stable business model by revolutionizing the educational experiences of individuals through the utilization of innovative, high-quality and technology-enabled educational solutions. LRN is well-positioned for long-term success, backed by increasing demand for school choice, innovative offerings, such as nationwide K–12 tutoring, and a focused growth strategy.
908 Devices
908 Devices is sharpening its focus by divesting a less profitable business and concentrating all its energy on handheld devices used in combating drug threats, chemical exposures and border security. Its sales are accelerating rapidly, with an increase in devices sold and the addition of new products, including those now utilized by governments in Europe. With more cash in hand, a robust product lineup and significant market opportunities ahead, it aims to achieve profitability soon and grow even faster by 2026.
Philip Morris
From a traditional cigarette company, Philip Morris is gradually transforming into a smoke-free player as represented by IQOS heated tobacco and ZYN nicotine pouches that are gradually becoming the company’s major focus area. Philip Morris is also strongly focused on rewarding shareholders and on cost cutting initiatives.
You can get the rest of the stocks on this list by signing up now for your two-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.