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3 Low-Volatility Stocks To Invest In Right Now

August 05
10:41 2022

Supply chain disruptions, the geopolitical crisis, soaring inflation, and the Fed’s aggressive interest rate hikes are raising the possibilities of a recession. Moreover, the U.S. GDP contracted in the second quarter, marking the second straight quarterly decline. According to TD Securities, there is more than a 50% chance of a U.S. recession within the next 18 months.

On the other hand, Jeffrey Roach, chief economist for LPL Financial, said, “A slowdown has to be significant, broad, and sustained before it qualifies as a recession. Currently, the economy is downshifting to a much slower growth path, but the decline in economic activity is not ‘significant’ in our view.”

Nonetheless, market volatility is rife, as is evident from the CBOE Volatility Index’s 27.6% year-to-date gains. Consequently, rising investors’ interest in low-volatility stocks is palpable from the Invesco S&P 500 Low Volatility ETF’s (SPLV) 2.1% gains over the past month.

We think investors must consider investing in these low volatility stocks, Leidos Holdings, Inc. (LDOS), Incyte Corporation (INCY), and The Coca-Cola Company (KO), given the near-term uncertainties.

LDOS and its subsidiaries provide services and solutions in the defense, intelligence, civil, and health markets in the United States and internationally. It operates through three segments- Defense Solutions; Civil; and Health. It has a beta of 0.72.

On August 2, 2022, LDOS entered into a definitive agreement with Cobham Limited to acquire Cobham Aviation Services Australia’s Special Mission business. This acquisition is expected to diversify LDOS’ portfolio and improve business prospects.

LDOS’ revenues increased 4.3% year-over-year to $3.60 billion for the second quarter ended July 1, 2022. Its net income increased marginally year-over-year to $172 million. Also, its non-GAAP EPS came in at $1.59, up 4.6% year-over-year, while its adjusted EBITDA increased marginally year-over-year to $366 million.

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