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Buy These 4 Low-Beta Stocks to Sail Through Market Volatility
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Concerns for an inflationary environment are not over yet. With oil prices remaining high, inflationary worries might again start to rebound. This is creating uncertainties and will continue to make the market volatile. Hence, creating a portfolio of low-beta stocks is of utmost importance since the securities will deliver healthy returns and shield against choppy market conditions.
In this regard, stocks like Transportadora de Gas del Sur S.A. (TGS - Free Report) , Lamb Weston Holdings, Inc. (LW - Free Report) , Vipshop Holdings Limited (VIPS - Free Report) and Novo Nordisk A/S (NVO - Free Report) are worth betting on.
Understanding Beta
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:
We have taken 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 as well 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 stocks among 18 that qualified for the screening:
Transportadora de Gas del Sur SA’s midstream asset portfolio has the most extensive natural gas pipeline network in Latin America. It generates stable fee-based revenues since its pipeline assets transport more than 60% of the gas consumed in Argentina.
Transportadora de Gas del Sur has witnessed upward estimate revisions for its 2023 bottom line in the past 60 days. The upward revisions are backed by TGS’ stable business model and a strong focus on creating differential value for shareholders. Also, the firm has lower debt exposure than the composite stocks belonging to the industry.
Lamb Weston Holdings is a well-known supplier of sweet potato, frozen potato, vegetable products and appetizers. The company supplies these products to retailers and restaurants across the globe and thereby secures steady cashflows.
Vipshop Holdings Limited is a well-known provider of premium and popular branded products. The company provides the products to customers in China at a considerable discount to retail prices. Over the past 30 days, Vipshop Holdings has witnessed upward earnings estimate revisions for 2023 earnings.
Novo Nordisk A/S is a well-known healthcare player. With operations across the globe, the company is driving change in order to beat serious chronic diseases, including diabetes.
You can get the rest of the stocks on this list by signing up now for your 2-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.
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Buy These 4 Low-Beta Stocks to Sail Through Market Volatility
Concerns for an inflationary environment are not over yet. With oil prices remaining high, inflationary worries might again start to rebound. This is creating uncertainties and will continue to make the market volatile. Hence, creating a portfolio of low-beta stocks is of utmost importance since the securities will deliver healthy returns and shield against choppy market conditions.
In this regard, stocks like Transportadora de Gas del Sur S.A. (TGS - Free Report) , Lamb Weston Holdings, Inc. (LW - Free Report) , Vipshop Holdings Limited (VIPS - Free Report) and Novo Nordisk A/S (NVO - Free Report) are worth betting on.
Understanding Beta
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:
We have taken 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 as well 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 stocks among 18 that qualified for the screening:
Transportadora de Gas del Sur SA’s midstream asset portfolio has the most extensive natural gas pipeline network in Latin America. It generates stable fee-based revenues since its pipeline assets transport more than 60% of the gas consumed in Argentina.
Transportadora de Gas del Sur has witnessed upward estimate revisions for its 2023 bottom line in the past 60 days. The upward revisions are backed by TGS’ stable business model and a strong focus on creating differential value for shareholders. Also, the firm has lower debt exposure than the composite stocks belonging to the industry.
Lamb Weston Holdings is a well-known supplier of sweet potato, frozen potato, vegetable products and appetizers. The company supplies these products to retailers and restaurants across the globe and thereby secures steady cashflows.
Vipshop Holdings Limited is a well-known provider of premium and popular branded products. The company provides the products to customers in China at a considerable discount to retail prices. Over the past 30 days, Vipshop Holdings has witnessed upward earnings estimate revisions for 2023 earnings.
Novo Nordisk A/S is a well-known healthcare player. With operations across the globe, the company is driving change in order to beat serious chronic diseases, including diabetes.
You can get the rest of the stocks on this list by signing up now for your 2-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.