HomeMost PopularBuy These 4 Low-Beta Stocks to Counter Market Volatility

Buy These 4 Low-Beta Stocks to Counter Market Volatility

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Given the strength in the labor market and stubborn inflation, most analysts now expect the first Fed rate cut to happen in September. Consequently, uncertainty and volatility persist in the stock market, underscoring the urgent need to construct a portfolio of low-beta stocks. These securities are anticipated to yield robust returns while providing protection against unpredictable market conditions.

In this regard, stocks like Strategic Education, Inc. STRA, The Progressive Corporation PGR, Stride Inc. LRN and Vitesse Energy, Inc. VTS 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 securityโ€™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 takenย a beta between 0 and 0.6ย 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:ย This ensures that the stocks saw positive price movement over the last month.

Average 20-Day Volume Greater Than 50,000:ย A substantial trading volume ensures that the stocks are easily tradable.

Price Greater Than or Equal to $5:ย They must all be trading at a minimum of $5 or higher.

Zacks Rank Equal to 1:ย 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 seeย the complete list of todayโ€™s Zacks #1 Rank stocks here.

Here are four of the 16 stocks that qualified for the screening:

Rising enrollment trends in the U.S. Higher Education segment continue to aidย Strategic Education.ย The Education Technology Services segment is also acting as a catalyst. With support from employer-associated enrollment, Strategic Education anticipates sustained robustness in the U.S. Higher Education business unit.

In the domestic market,ย The Progressive Corporationย is among the largest auto insurers. The company continues to bank on increasing average earned premiums per policy and is expected to witness earnings growth of 84.8% this year.

Strideย maintains a stable business model by revolutionizing the educational experiences of individuals through the utilization of innovative, high-quality and technology-enabled educational solutions.

Vitesse Energy is discovering promising drilling prospects on the horizon, prompting it torevise its projections for both annual production and capital expenditure upward for this year.

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. Itโ€™s easy to use. Everything is in plain language. And itโ€™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 Zacksโ€™ portfolios and strategies are available at:ย https://www.zacks.com/performance.

Zacks Names #1 Semiconductor Stock

Itโ€™s only 1/9,000th the size of NVIDIA which skyrocketed more than +800% since we recommended it. NVIDIA is still strong, but our new top chip stock has much more room to boom.

With strong earnings growth and an expanding customer base, itโ€™s positioned to feed the rampant demand for Artificial Intelligence, Machine Learning, and Internet of Things. Global semiconductor manufacturing is projected to explode from $452 billion in 2021 to $803 billion by 2028.

See This Stock Now for Free >>

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Strategic Education Inc. (STRA) : Free Stock Analysis Report

The Progressive Corporation (PGR) : Free Stock Analysis Report

Stride, Inc. (LRN) : Free Stock Analysis Report

Vitesse Energy, Inc. (VTS) : Free Stock Analysis Report

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Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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