Best Low-Beta Stocks to Own Right Away: FUTU, JJSF, NGS & COCO

The U.S. stock market will remain volatile as the Department of Justice has launched a criminal probe into Federal Reserve Chair Jerome Powell. Traders are now favoring safe-haven assets, reflecting growing market uncertainty.

Amid the increasing fears, one can also bet on low-beta stocks like Futu Holdings Limited FUTU, J & J Snack Foods Corp. JJSF, Natural Gas Services Group, Inc. NGS and The Vita Coco Company, Inc. COCO.

What Does Beta of a Stock Measure?

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 of the 13 stocks that qualified for the screening:

Futu Holdings

By employing fully digitalized financial services, Futu Holdings gives its clients a new essence of investing. It has been growing at a rapid pace since its clients are investing more money, reflecting the heightened trust of people, even from countries outside Hong Kong. This makes Futu Holdings a true global player.

J & J Snack Foods

J & J Snack Foods is a well-known name in the snack food industry. The company has a strong balance sheet and is highly focused on returning capital to shareholders. JJSF has a negligible debt load with a much higher cash balance and is determined to accelerate repurchases of stock.

Natural Gas Services

The United States is sending more natural gas overseas as Liquefied Natural Gas (LNG). To do this, gas needs to travel through pipelines to coastal export terminals. This creates higher demand for Natural Gas Services’ compression equipment to push the gas through the pipelines. So, as more LNG is exported and more pipelines are built, companies like NGS benefit by renting out more of their compression machines.

The Vita Coco Company

COCO is a major producer of healthy and natural drinks. In the United States, The Vita Coco Company is known for its leading coconut water brand. In this business category, COCO is thriving since demand for coconut water is booming across every region, highlighting a strong business outlook.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research