For Immediate Release

Chicago, IL – January 17, 2017 - Stocks in this week’s article include Ollie's Bargain Outlet Holdings Inc. (NASDAQ:OLLI – Free Report ), Premier Inc. (NASDAQ: PINC – Free Report ), Penumbra Inc. (NYSE: PEN – Free Report ), DigitalGlobe Inc. (NYSE: DGI – Free Report ) and Sunrun Inc. (NASDAQ: RUN – Free Report ).

Screen of the Week of Zacks Investment Research:

Tame Market Volatility with 5 Low-Beta Stocks

In the investment community, there is a thumb rule that riskier securities will bring greater returns when the market is walking on the bullish path. In fact, many investors build their portfolio giving high weightage to risky stocks. But we should not forget the converse situation when the market starts slipping.

We have created a strategy wherein less risky stocks combined with some other parameters can generate handsome returns.

What is Beta?

Beta indicates the volatility of a particular stock with respect to the market. In other words, beta measures the extent of stock price movement relative to the market (we are considering S&P 500 here).

If a company has a beta of 1, it means that the relative volatility of the stock is the same as that of the S&P 500. In the same way, if the stock’s beta is greater than 1 then it is more volatile compared to the market. Conversely, a beta below 1 signifies less volatility.

Now, if a portfolio’s beta is 3, it is three times more volatile than the market. Hence, if the market is projected to give 20% return, the portfolio will then definitely contribute 60% return which is amazing.

However, the opposite case also holds true. If the market slips 20% then the portfolio return plummets 60% which is surely a matter of concern.

The Winning Strategy

In our screening criteria we included beta in the range of 0 to 0.6 for short listing low risk stocks. But this can’t be the only criterion for betting on stocks. The other parameters that need to be added to create a winning portfolio are:

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 12 stocks that qualified the screening:

Headquartered in Harrisburg, PA, Ollie's Bargain Outlet Holdings Inc. (NASDAQ:OLLI – Free Report ) is a merchandise retailer of various brand name products like foods, housewares etc. The company surpassed the Zacks Consensus Estimate in each of the last four quarters with an average beat of 17.64%. We also expect the company to witness year-over-year earnings improvement of 30.6% for the current year.

Headquartered in Charlotte, NC, Premier Inc. (NASDAQ: PINC – Free Report ) is a healthcare improvement company in U.S. For the current fiscal year, the company will likely report 101.2% year-over-year higher earnings. Over the last 60 days, the Zacks Consensus Estimate for current year earnings saw an increase of almost 4%.

Headquartered in Alameda, CA, Penumbra Inc. (NYSE: PEN – Free Report ) is the designer and developer of medical devices in the U.S. and the global market. Over the last four quarters, the company delivered an average earnings surprise of 115.07%. Moreover, the Zacks Consensus Estimate for the current fiscal year narrowed from a loss of 18 cents to a loss of 12 cents.

DigitalGlobe Inc. (NYSE:DGI – Free Report ) is the provider of commercial high-resolution earth imagery products and services in the global market. This Westminster, CO based company beat the Zacks Consensus Estimate in each of the prior four quarters, with an average positive surprise of 384.67%. DigitalGlobe projects 115.4% year-over-year earnings growth for the current fiscal year.

Sunrun Inc. (NASDAQ:RUN – Free Report ) – headquartered in San Francisco, CA – designs and maintains residential solar energy systems in the U.S. For the current fiscal year, the company is expected to witness 174.5% year-over-year earnings improvement. The company also delivered an average positive earnings surprise of 134.71% for the prior four quarters.

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.

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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.

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Ollie's Bargain Outlet Holdings, Inc. (OLLI): Free Stock Analysis Report
 
Premier, Inc. (PINC): Free Stock Analysis Report
 
Penumbra, Inc. (PEN): Free Stock Analysis Report
 
DigitalGlobe, Inc (DGI): Free Stock Analysis Report
 
Sunrun Inc. (RUN): Free Stock Analysis Report
 
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