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For Immediate Release
Chicago, IL – June 30, 2023 – Today, Zacks Investment Ideas feature highlights International Business Machines IBM, NetEase NTES, and Juniper Networks JNPR.
Limit Volatility With These 3 Low-Beta Tech Stocks
The technology sector has been a favorite among investors, providing explosive gains. Of course, many are aware of the sector’s increased volatility.
However, targeting low-beta technology stocks could be a great solution if investors want to shield themselves from spooky price swings.
Beta is a measure of a stock’s systematic risk, or volatility, compared to the market as a whole. Generally, the benchmark is the S&P 500, which has a beta of 1.0.
Historically, stocks with a beta higher than 1.0 are more sensitive to the market’s movements, while those with a beta less than 1.0 are less susceptible.
Three low-beta technology stocks – International Business Machines, NetEase, and Juniper Networks – could all be considered.
Let’s take a closer look at each one.
International Business Machines
IBM, a current Zacks Rank #2 (Buy), is an information technology (IT) company that’s been divided into two parts: IBM and Kyndryl. Shares currently yield a sizable 5% annually, crushing the Zacks Computer and Technology sector average.
IBM could entice value-focused investors, further reflected by the stock’s Style Score of “B” for Value. Shares currently trade at a 14.2X forward earnings multiple, beneath five-year highs of 16.5X in 2022.
In addition, shares have recently seen buyers step up aggressively near the 50-day moving average in multiple instances, a level that the stock previously struggled against.
NetEase
NetEase, a current Zacks Rank #1 (Strong Buy), is an Internet technology company engaged in the development of applications, services, and other technologies for the Internet in China. The company has enjoyed positive earnings estimate revisions, with the trend particularly noteworthy for its current and next fiscal year.
The company posted notably strong results in its latest release, exceeding the Zacks Consensus EPS estimate by nearly 30% and delivering a modest revenue surprise. The market reacted well to the better-than-expected results, sparking an uptrend for shares.
NetEase shares provide exposure to technology paired with a passive income stream; NTES shares currently yield 1.9%, with its payout growing by an impressive 30% over the last five years. And to top it off, the company’s 22% payout ratio resides on the sustainable side.
Juniper Networks
Juniper Networks, a current Zacks Rank #2 (Buy), is a leading provider of networking solutions and communication devices. The company has enjoyed modest positive earnings estimate revisions across several timeframes, with analysts in full agreement.
The company is forecasted to grow steadily, with estimates calling for 20% earnings growth on 10% higher revenues in its current fiscal year (FY23). Looking ahead to FY24, projections allude to an additional 7% of earnings growth on 3% improved revenues.
It may be worth keeping an eye out for JNPR’s next quarterly release expected on July 27th; the Zacks Consensus EPS Estimate of $0.55 indicates a 30% jump in earnings year-over-year. Our consensus revenue estimate sits at $1.4 billion, 12% higher than the year-ago quarter.
The company’s revenue has recently seen an acceleration in growth.
Bottom Line
Targeting low-beta stocks can help shield investors against volatility, as these stocks are less susceptible to the market’s movements.
For those who seek exposure to tech, all three low-beta stocks above fit the criteria.
In addition, all three have seen their earnings estimates drift higher as of late, indicating favorable optimism among analysts.
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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
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International Business Machines Corporation (IBM) : Free Stock Analysis Report
Juniper Networks, Inc. (JNPR) : Free Stock Analysis Report
NetEase, Inc. (NTES) : Free Stock Analysis Report
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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