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Play it Safe With Low-Beta High Quality Stocks: LNG, BZ & AEM
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Key Takeaways
Investors are turning to low-beta stocks amid ongoing market uncertainty and volatility.
LNG, BZ, and AEM meet strict screening criteria for stability and strong recent price performance.
Cheniere, Kanzhun, and Agnico Eagle Mines show solid cash flows and strong market positioning.
According to a CNBC article, investors are seeking gold as an investment amid rising economic and geopolitical uncertainties. In fact, most of the analysts believe that the U.S. stock market will remain volatile, thereby increasing the need for low-beta stocks now.
One can safeguard their portfolio by betting on low-beta stocks like Cheniere Energy Inc. (LNG - Free Report) , Kanzhun (BZ - Free Report) and Agnico Eagle Mines Limited (AEM - Free Report) .
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 19 stocks that qualified for the screening:
Cheniere Energy
As a well-known producer and exporter of LNG, Cheniere Energy is well-positioned to capitalize on the growing demand for the commodity. The rising global demand for LNG is being backed by a strong preference from countries in Asia and Europe for cleaner fuel. With a strong and investment-grade balance sheet, Cheniere Energy is banking on take-or-pay long-term contracts, securing stable cash flows.
Kanzhun
Kanzhun is known for running BOSS Zhipin, China’s top job-hunting app. The company has a strong cash position with a reserve exceeding RMB 16 billion. BZ’s robust operations are reflected in its more than RMB 1 billion cash generation every three months.
Agnico Eagle Mines
Agnico Eagle Mines is a well-known name as the world’s second-largest producer of gold and thus benefits from the current high price of the yellow metal. Having a pipeline of key developments associated with exploration and production activities, AEM is well poised to generate incremental cash flows.
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
Play it Safe With Low-Beta High Quality Stocks: LNG, BZ & AEM
Key Takeaways
According to a CNBC article, investors are seeking gold as an investment amid rising economic and geopolitical uncertainties. In fact, most of the analysts believe that the U.S. stock market will remain volatile, thereby increasing the need for low-beta stocks now.
One can safeguard their portfolio by betting on low-beta stocks like Cheniere Energy Inc. (LNG - Free Report) , Kanzhun (BZ - Free Report) and Agnico Eagle Mines Limited (AEM - Free Report) .
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 19 stocks that qualified for the screening:
Cheniere Energy
As a well-known producer and exporter of LNG, Cheniere Energy is well-positioned to capitalize on the growing demand for the commodity. The rising global demand for LNG is being backed by a strong preference from countries in Asia and Europe for cleaner fuel. With a strong and investment-grade balance sheet, Cheniere Energy is banking on take-or-pay long-term contracts, securing stable cash flows.
Kanzhun
Kanzhun is known for running BOSS Zhipin, China’s top job-hunting app. The company has a strong cash position with a reserve exceeding RMB 16 billion. BZ’s robust operations are reflected in its more than RMB 1 billion cash generation every three months.
Agnico Eagle Mines
Agnico Eagle Mines is a well-known name as the world’s second-largest producer of gold and thus benefits from the current high price of the yellow metal. Having a pipeline of key developments associated with exploration and production activities, AEM is well poised to generate incremental cash flows.
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.