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5 Top-Ranked High-Beta Stocks to Play the Roaring Market

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Wall Street kicked off June on a solid note. The tech-heavy Nasdaq and the small-cap index Russell 2000 are on cloud nine, touching a record high this month. Moreover, the Dow Jones hit a three-month high on Jun 6. A host of factors made this rally possible among which ebbing trade tensions is at the forefront.

Investors should note that Treasury Secretary Steven Mnuchin reportedly advised President Donald Trump to excuse Canada from metal tariffs at a meeting on Tuesday. And China has also reportedly taken initiatives to suppress trade war tensions by pledging to buy around $70 billion of U.S. goods so that the United States can cut its trade deficit.

While tensions linger with Mexico imposing tariffs worth around $3 billion on imports from the United States and several other countries considering retaliatory measures against U.S. duties on steel and aluminum, the latest developments in trade show signs of cooling tensions.

Meanwhile, the World Bank estimates that the global economy will likely expand 3.1% this year, the same as its January projection. The growth rate also matched the figure of 2017, which itself was the best year since 2011. Notably, Q1 GDP growth data of several developed economies including the Eurozone flared up slowdown worries. But the reaffirmation of the World Bank outlook probably dispelled that fear to some extent.

Moreover, the U.S. economy seems to be in its best phase since the last recession. The economy grew 2.2% in Q1 and recent estimates call for robust acceleration (which is 3.7%) in Q2 after a moderate Q1. Meanwhile, the unemployment rate dived to an 18-year low and manufacturing activity grew at a decent clip despite the ongoing trade spat.

Needless to say, the broader market will cheer such positive developments. The three key indexes, namely the S&P 500, the Dow Jones Industrial Average and the Nasdaq Composite have added about 1.%, 2.2% and 2.6%, respectively, in the last five days (as of Jun 6, 2018).

Why High Beta?

Beta is directly related to market movement. Notably, high beta stocks tend to rise or fall more than the stock market and are thus more volatile. A beta of more than 1 indicates that the price tends to move higher than the broader market and vice versa. As a result, when markets soar, high beta stocks experience larger gains than the broader market counterparts and thus, outpace their rivals.

In this regard, investors can play a few high beta stocks as long as the trend is their friend.

KapStone Paper and Packaging Corporation (KS - Free Report) ) – Beta 3.03

The Zacks Rank #1 company operates in the paper, packaging, forest products, and related industries. The stock comes from a top-ranked (top 22%) Zacks industry.

Weight Watchers International Inc (WTW - Free Report) ) – Beta 3.22

The Zacks Rank #1 company is the largest provider of weight-control programs in the world. The stock belongs to a top-ranked (top 13%) Zacks industry.

Five Prime Therapeutics Inc. (FPRX - Free Report)  – Beta 3.41

The Zacks Rank #2 company is a biotechnology company.

J.Jill Inc. (JILL - Free Report)  – Beta 4.08

The Zacks Rank #2 company operates as a specialty retailer of women’s apparel. The stock hails from a top-ranked (top 17%) Zacks industry.

Hanger Inc. (HNGR - Free Report) ) – Beta 4.13

The Zacks Rank #2 company delivers orthotic and prosthetic patient care and distributes O&P products and rehabilitative solutions. The stock comes from a top-ranked Zacks industry (top 11%).

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