Back to top

Image: Bigstock

5 Low-Risk Stocks to Buy for Epic Price Swings Since 1929

Read MoreHide Full Article
Times are really rough for trading right now. The coronavirus pandemic has disrupted supply chains, weighed on corporate profits, hampered economic growth and resulted in volatile weeks for stocks. But do we see a light at the end of the tunnel? After all, some of the hardest hit places across the globe has shown encouraging signs of reduction in coronavirus infections. 
 
Current social distancing and lockdown strategies helped New York report a slowdown in the outbreak. Italy and Spain too reported a slowdown, while Wuhan, China, which is the epicentre of the viral outbreak, recently reported no new deaths for the first time since January. These data surely signal at some positivity ahead for the economy.
 
However, stocks failed to maintain the remarkable rally of Apr 6. Aggravating the situation, major bourses ended in the red on Apr 7. This is because majority of market pundits believe that the coronavirus shutdowns will significantly impact the economy beyond the second quarter.
 
Goldman’s David Kostin added on Apr 7 that “risk to the downside is greater than the opportunity to the upside from this point where we stand today.” He added, “I would just remind you that in 2008 in the fourth quarter there were many different rallies, I call them bear market rallies, some of which almost 20% a couple of times — but the market did not bottom until March of 2009.”
 
Nevertheless, so far this month, the S&P 500 has faced wild swings. The index had lost 4.4%, 1.5% and 0.2% on Apr 1, 3 and 7, respectively. Meanwhile, the index gained 2.3% and 7% on Apr 2 and 6, correspondingly. Take a look – 
 
 
In fact, the broader S&P 500’s average daily percentage price change over the past five weeks has been plus or minus 4.8%, a historic feat. The only time S&P 500’s price swings were greater than the said period was during the market crash of
1929, per Bespoke Investment Group. 
 
This also explains why the Cboe Volatility Index, a measure of expected volatility in the upcoming 30 trading days, remains elevated at around the 40s after having topped 80s in March, and is well above its long-term average of almost 20. 
 
Last but not the least, it will be too early to bank on a V-shaped recovery. What’s more, the market can again retest the Mar 23 lows since it is currently driven on sentiment, and any discouraging news on the pandemic might hurt investors’ confidence.
 
Market is Wavering: Buy 5 Low-Volatility Stocks Now
 
As markets seem to be plagued with widespread uncertainty, low-volatility stocks do appear a good bet at the moment. After all, these stocks tend to hold up better in tough times and have done pretty well over longer periods of time, even before the coronavirus-induced market gyration.
 
In order to screen for low-volatility stocks or which are inherently less volatile than the markets they trade in, low-beta needs to be considered. In this case, a low beta ranges from 0 to 1. By the way, a beta is a measure of volatility that shows how closely a stock’s price movement correlates with a benchmark.
 
Further, we have selected such low-beta stocks that flaunt a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
 
A10 Networks, Inc. (ATEN - Free Report) provides software and hardware solutions. The company has a beta of 0.82. The Zacks Consensus Estimate for its current-year earnings has moved up 8% over the past 60 days. The company’s expected earnings growth rate for the current year is more than 100%.
 
Chemed Corporation (CHE - Free Report) provides hospice and palliative care services. The company has a beta of 0.85. The Zacks Consensus Estimate for its current-year earnings has risen 4.3% over the past 60 days. The company’s expected earnings growth rate for the current year is 17.1%.
 
Core-Mark Holding Company, Inc. (CORE - Free Report) markets fresh and broad-line supply solutions. The company has a beta of 0.26. The Zacks Consensus Estimate for its current-year earnings has moved 1.1% north over the past 60 days. The company’s expected earnings growth rate for the current quarter and year is 14% and 4.1%, respectively.
 
Eli Lilly and Company (LLY - Free Report) discovers, develops, manufactures and markets pharmaceutical products. The company has a beta of 0.16. The Zacks Consensus Estimate for its current-year earnings has climbed 0.1% over the past 60-day period. The company’s expected earnings growth rate for the current quarter and year is 11.3% and 12.1%, respectively.
 
Masimo Corporation (MASI - Free Report) is a medical technology company. The company has a beta of 0.80. The Zacks Consensus Estimate for its current-year earnings has advanced 0.9% over the past 60 days. The company’s expected earnings growth rate for the current quarter and year is 10.5% and 10.3%, respectively.
 
Free: Zacks’ Single Best Stock Set to Double
 
Today you are invited to download our latest Special Report that reveals 5 stocks with the most potential to gain +100% or more in 2020. From those 5, Zacks Director of Research, Sheraz Mian hand-picks one to have the most explosive upside of all.
 
This pioneering tech ticker had soared to all-time highs and then subsided to a price that is irresistible. Now a pending acquisition could super-charge the company’s drive past competitors in the development of true Artificial Intelligence. The earlier you get in to this stock, the greater your potential gain.