Although coronavirus vaccines are rolling out at a massive pace, the Omicron variant will keep the market extremely volatile. The variant continues to hurt companies’ earnings. Also, slowing spending and manufacturing activities are worrying investors.
Hence, creating a portfolio of low-beta stocks is of utmost importance since the securities will deliver healthy returns and provide a shield against choppy market conditions.
Meaning of 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 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 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 eight that qualified the screening:
Sensus Healthcare, Inc.
SRTS
is a leading manufacturer of superficial radiation therapy devices. The Zacks Consensus Estimate for Sensus Healthcare’s bottom line for 2021 and 2022 has been revised upward over the past 30 days.
Sensus Healthcare is anticipating to report record sales for the December quarter of 2021 and expects the momentum to continue in the first quarter of this year. Sensus Healthcare’s stock has surged 128.2% over the past year versus the decline of 3.9% of the composite stocks belonging to the industry.
Toyota Motor Corporation
TM
is a leading manufacturer and designer of passenger and commercial vehicles. With an aim to produce millions of electric vehicles in the coming years, Toyota Motor is promoting electrification strategies that will drastically reduce emissions of CO2.
All those initiatives are being reflected in TM’s stock price. Toyota Motor’s stock has surged 42% over the past year, outpacing the 8.5% rise of the composite stocks belonging to the industry.
ACM Research, Inc.
ACMR
has always been on investors’ radar since it has been providing cost-effective and high-performance process solutions employed by semiconductor manufacturers to drastically improve productivity.
With a mission of becoming a leading equipment supplier to the semiconductor industry globally, ACM Research expects to witness strong growth this year. Over the past 30 days, ACM Research has witnessed upward earnings estimate revisions for 2022.
Vocera Communications, Inc.
VCRA
is a leading provider of clinical communication and workflow solutions. In order to engage with patients and families along with collaborating with co-workers, many hospitals and healthcare facilities have selected Vocera solutions.
Over the past year, Vocera’s stock price has gained 83.5% versus the 8% rise of the composite stocks belonging to the industry.
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
.
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