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Low-Beta Winners: Why USAC, COCO, NGS & AEM are Must-Buy Stocks Now
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Key Takeaways
The screen targets stocks with 00.6 beta, price gains and solid trading volume.
USAC plans to add new compression equipment by year-end to support further growth.
COCO is thriving as demand for its leading coconut water brand grows across regions.
Reuters reported that expectations for interest rate cuts are changing rapidly, while the economic data is uneven. Thus, the U.S. stock market will likely remain volatile, especially with questions about who might lead the Federal Reserve next.
To sail through the uncertainty, one can bet on low-beta stocks like USA Compression Partners, LP (USAC - Free Report) , The Vita Coco Company, Inc. (COCO - Free Report) , Natural Gas Services Group, Inc. (NGS - 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 24 stocks that qualified for the screening:
USA Compression Partners
USA Compression Partners is a renowned name in the natural gas compression business. It is well-positioned to benefit from rising demand for cleaner fuels and higher LNG export volumes. On its latest earnings call, USAC unveiled its plan to add most of its new equipment by year-end, setting the stage for even more growth next year.
The Vita Coco Company
COCO is a well-known producer of healthy and natural drinks. In the United States, The Vita Coco Company is known for its leading coconut water brand. In this business category, COCO is thriving since demand for coconut water is booming across every region, highlighting a strong business outlook.
Natural Gas Services
The United States is sending more natural gas overseas as Liquefied Natural Gas (LNG). To do this, gas needs to travel through pipelines to coastal export terminals. This creates higher demand for Natural Gas Services’ compression equipment to push the gas through the pipelines. So, as more LNG is exported and more pipelines are built, companies like NGS benefit by renting out more of their compression machines.
Agnico Eagle Mines
Agnico Eagle Mines is the second-largest producer of gold across the globe. AEM, having a strong financial strength and low risk profile, is very optimistic about the gold market with a positive long-term view.
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
Low-Beta Winners: Why USAC, COCO, NGS & AEM are Must-Buy Stocks Now
Key Takeaways
Reuters reported that expectations for interest rate cuts are changing rapidly, while the economic data is uneven. Thus, the U.S. stock market will likely remain volatile, especially with questions about who might lead the Federal Reserve next.
To sail through the uncertainty, one can bet on low-beta stocks like USA Compression Partners, LP (USAC - Free Report) , The Vita Coco Company, Inc. (COCO - Free Report) , Natural Gas Services Group, Inc. (NGS - 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 24 stocks that qualified for the screening:
USA Compression Partners
USA Compression Partners is a renowned name in the natural gas compression business. It is well-positioned to benefit from rising demand for cleaner fuels and higher LNG export volumes. On its latest earnings call, USAC unveiled its plan to add most of its new equipment by year-end, setting the stage for even more growth next year.
The Vita Coco Company
COCO is a well-known producer of healthy and natural drinks. In the United States, The Vita Coco Company is known for its leading coconut water brand. In this business category, COCO is thriving since demand for coconut water is booming across every region, highlighting a strong business outlook.
Natural Gas Services
The United States is sending more natural gas overseas as Liquefied Natural Gas (LNG). To do this, gas needs to travel through pipelines to coastal export terminals. This creates higher demand for Natural Gas Services’ compression equipment to push the gas through the pipelines. So, as more LNG is exported and more pipelines are built, companies like NGS benefit by renting out more of their compression machines.
Agnico Eagle Mines
Agnico Eagle Mines is the second-largest producer of gold across the globe. AEM, having a strong financial strength and low risk profile, is very optimistic about the gold market with a positive long-term view.
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.