Markets tumbled on Friday as concerns over a possible trade war between the U.S. and China escalated once again. This now nearly constant turmoil has left many investors desperate to find stability anywhere they can.
The Trump administration recently threatened to impose tariffs on $50 billion worth of Chinese imports, only to see the Chinese responded in kind. Trump then doubled down on Thursday when he announced that the U.S. would consider tariffs on an additional $100 billion worth of imports from China.
The most recent back-and-forth between the U.S. and China has dragged down markets, adding to a nearly three-month long bearish turn that has seen the S&P 500 sink 5%.
With that said, investors should turn their attention to stocks that have proven to be less volatile compared to the market as a whole. One metric that is particularly useful in this situation is a stock’s beta rating, which is a representation of how the stock responds to swings in the market. Historically, stocks and securities with betas below 1.0 are less volatile than the market.
Now let’s look at three low-beta stocks that investors should consider as economic tensions between the world’s two largest economies ramp up.
1. Toyota (TM - Free Report)
This Japanese auto giant is currently a Zacks Rank #1(Strong Buy) and rocks an “A” grade for Value in our Style Scores system. Toyota’s value could come in handy during the current market downturn when outsized growth becomes much harder to come by.
Toyota has also reported a strong streak of solid earnings beats, which might prove useful as we head into first quarter earnings season. Furthermore, Toyota’s beta of 0.75 theoretically means the stock has been 25% less volatile compared to the market.
2. Macy's (M - Free Report)
Macy’s stock has climbed 17% over the last 12 weeks amid the overall market downturn, as investors regain confidence in the industry bellwether. Looking ahead, Macy’s Q1 earnings estimates have been trending upward in a big way, with our consensus mark jumping from $0.23 to $0.36 within the last 60 days.
Macy’s also looks like a strong value play at the moment. The company is trading with a Forward P/E of 8.7, which is far below the “Retail - Regional Department Stores” industry’s average P/E of 11. Better still, Macy’s is currently a Zacks Rank #1 (Strong Buy) with a beta of 0.75.
3. Guess' (GES - Free Report)
Within the last 30 days, Guess’ has earned three earnings estimate revisions for its current full-year, with 100% agree to the upside. The clothing company has also seen its stock price skyrocket 52% in the last four weeks alone, bucking the major market downturn. Guess’ is also currently a Zacks Rank #1 (Strong Buy).
What’s more, Guess’ rocks a beta of 0.35. This means Guess’ stock is, in theory, 65% less volatile than the market, which means now might be a great time to buy.
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With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.
It's not the one you think.
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