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Secure Your Portfolio With 4 Low-Beta Stocks: PGR, JD, AVO, PRA
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As investors remain vigilant about the escalating conflict in the Middle East, uncertainty continues to dominate the market. The rise in the Cboe Volatility Index, often referred to as Wall Street's fear gauge, reflects this increased anxiety and doubt among investors.
Given this uncertainty, constructing a portfolio of low-beta stocks may be prudent. In this regard, stocks like The Progressive Corporation (PGR - Free Report) , JD.com Inc (JD - Free Report) , Mission Produce Inc. (AVO - Free Report) and ProAssurance Corporation (PRA - Free Report) are worth betting on.
What Are Low Beta Stocks?
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 among 12 stocks that qualified for the screening:
Progressive Corporation
By increasing the premiums, Progressive Corporation has successfully countered the challenges posed by high claims costs, leading to improved underwriting profitability. Despite the premium hikes, PGR has still been able to grow its customer base, which indicates strong demand and competitive positioning in the market.
JD.com
JD.com has grown from an online shopping platform to helping other businesses run more efficiently using its technology. The company is known for its supply chain and has become a leader in this space. JD.com is strongly committed to returning capital to shareholders, as reflected in its recent announcement of $5 billion in a new stock buyback program.
Mission Produce
As a global leader in the avocado industry, Mission Produce is well-positioned to capitalize on the growing consumer demand for healthy eating. Avocados, rich in more than 20 vitamins and minerals, offer significant health benefits for the heart, skin and weight management, making them an increasingly popular choice among health-conscious consumers.
ProAssurance
ProAssurance has seen an increase in renewal pricing in its medical professional liability business, indicating that its pricing strategy is aligning with the rising costs of claims. Also, the company has a solid financial position, as evidenced by its balance sheet, which shows that more than 90% of its investment portfolio consists of investment-grade fixed maturities.
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.
Image: Bigstock
Secure Your Portfolio With 4 Low-Beta Stocks: PGR, JD, AVO, PRA
As investors remain vigilant about the escalating conflict in the Middle East, uncertainty continues to dominate the market. The rise in the Cboe Volatility Index, often referred to as Wall Street's fear gauge, reflects this increased anxiety and doubt among investors.
Given this uncertainty, constructing a portfolio of low-beta stocks may be prudent. In this regard, stocks like The Progressive Corporation (PGR - Free Report) , JD.com Inc (JD - Free Report) , Mission Produce Inc. (AVO - Free Report) and ProAssurance Corporation (PRA - Free Report) are worth betting on.
What Are Low Beta Stocks?
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 among 12 stocks that qualified for the screening:
Progressive Corporation
By increasing the premiums, Progressive Corporation has successfully countered the challenges posed by high claims costs, leading to improved underwriting profitability. Despite the premium hikes, PGR has still been able to grow its customer base, which indicates strong demand and competitive positioning in the market.
JD.com
JD.com has grown from an online shopping platform to helping other businesses run more efficiently using its technology. The company is known for its supply chain and has become a leader in this space. JD.com is strongly committed to returning capital to shareholders, as reflected in its recent announcement of $5 billion in a new stock buyback program.
Mission Produce
As a global leader in the avocado industry, Mission Produce is well-positioned to capitalize on the growing consumer demand for healthy eating. Avocados, rich in more than 20 vitamins and minerals, offer significant health benefits for the heart, skin and weight management, making them an increasingly popular choice among health-conscious consumers.
ProAssurance
ProAssurance has seen an increase in renewal pricing in its medical professional liability business, indicating that its pricing strategy is aligning with the rising costs of claims. Also, the company has a solid financial position, as evidenced by its balance sheet, which shows that more than 90% of its investment portfolio consists of investment-grade fixed maturities.
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.