For Immediate Release
Chicago, IL –July 28, 2017 - Stocks in this week’s article includePost Holdings Inc. (NYSE: (NYSE:POST) – Free Report), Magellan Health Inc. (NASDAQ: (NASDAQ:MGLN) – Free Report), Layne Christensen Company (NASDAQ: (NASDAQ:LAYN) – Free Report), Badger Meter Inc. (NYSE: (NYSE:BMI) – Free Report) and Carolina Financial Corporation (NASDAQ: (NASDAQ:CARO) – Free Report).
Want to Avoid Market Volatility? Invest in These 5 Low-Beta Stocks
Proper research and detailed analysis are the only formulae to earn lucrative results when it comes to the stock market. It is not a thumb rule that to get lucrative returns one should invest in risky securities. The rule works best in bullish market but the converse is also true.
In this article, we have figured out a proven strategy that says lucrative returns can also be earned from less-risky stocks if some other parameters are considered.
Beta Understanding
Beta measures the volatility or risk of a particular asset in comparison 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. But 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 one 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.
Here are five of the 15 stocks that qualified the screening:
Headquartered in St. Louis, MOPost Holdings Inc. (NYSE:POST – Free Report) manufactures ready-to-eat cereal. The company beat the Zacks Consensus Estimate in three of the last four quarters with an average positive earnings surprise of 20.06%. For the fiscal year ended Sep 2017, the Zacks Consensus Estimate for earnings has been revised upward over the last 30 days.
Magellan Health Inc.(NASDAQ:MGLN – Free Report) – based in Scottsdale, AZ – is involved in operations related to healthcare management. The company is expected to post year-over-year earnings growth of 9.9% during 2017. Also, Magellan delivered an average positive earnings surprise of 23.37% for the last four quarters.
Headquartered in The Woodlands, TX Layne Christensen Company (NASDAQ:LAYN – Free Report) is a water management company. For the fiscal year ended Jan 2018, the company will likely witness year-over-year earnings growth of 69.9%. Also, the Zacks Consensus Estimate for the fiscal year has improved over the last 60 days.
Badger Meter Inc. (NYSE:BMI – Free Report), headquartered in Milwaukee, WI, is the prime supplier of solutions related to flow measurement all over the world. The company witnessed an average positive earnings surprise of 0.11% for the last four quarters. Also, for 2017, Badger Meter projects 13.2% earnings increment.
Based in Charleston, SC, Carolina Financial Corporation (NASDAQ:CARO – Free Report) is the provider of a range of services related to retail banking in the home state and in North Carolina. The company beat the Zacks Consensus Estimate in each of the prior four quarters with an average positive earnings surprise of 11.10%.
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.
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Carolina Financial Corporation (CARO): Free Stock Analysis Report
Layne Christensen Company (LAYN): Free Stock Analysis Report
Post Holdings, Inc. (POST): Free Stock Analysis Report
Badger Meter, Inc. (BMI): Free Stock Analysis Report
Magellan Health, Inc. (MGLN): Free Stock Analysis Report
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