The year 2016 has been rather challenging in terms of stock price movement. The markets have been battling uncertainties like the global oil crisis, China’s growth worries, geopolitical tensions, and lack of clarity in the Federal Reserve’s monetary policy tightening. And as if these weren’t enough, U.K’s vote to exit the European Union (EU) has now heightened economy volatility.
Brexit Blues Weigh on U.S. Stocks
The Brexit decision has spooked investors, who now worry about destabilization of the U.S. economy and a slowdown in global growth. The British pound fell to 30-year low, while major indexes like the S&P 500 and the Dow saw their year-to-date gains being wiped out. Also, on Friday, the fear-gauge CBOE Volatility Index (VIX) saw its highest percentage rise since Aug 8, 2011, thereby signaling growing investor apprehension over global economic growth prospects.
Fundamentals to Consider Amid Ongoing Uncertainty
When uncertainty prevails, investors often follow the “herd” and take a hasty decision of dumping stocks that are hovering around their 52-year lows. As such, the market is often characterized by the fear and greed of investors. Nonetheless, even such stocks can turn out to be attractive if investors exercise patience and prudently pick players with strong fundamentals and long-term growth potential.
Notably, owing to their significant growth potential, small-cap stocks (stocks with a market cap of around $1 billion or below) usually tend to outperform their large-cap peers over time. However, these can be riskier than well-known large-cap companies. Nonetheless, the growth potential of small caps is tempting against the current economic backdrop of continued strength in the U.S. dollar and oil price uncertainty.
Hence, it makes perfect sense to analyze small-cap stocks near their 52-week lows as these could actually be solid buys.
Zacks to the Rescue
Using the Zacks Stock Screener we have zeroed in on seven stocks based on credentials like a Zacks Rank #2 (Buy), market cap of less than $2 billion, and current price as a percentage of the 52-week high-low range under 10 (a value of 0 indicates that the stock is trading at its 52-week low).
The idea behind this is to pick stocks that can supersede near-term pressure and lead to profitability in the long term.
7 Stocks to Beat Volatility
Headquartered in Philadelphia, PA, AgroFresh Solutions, Inc. AGFS provides data-driven specialty solutions worldwide. Its solutions enable growers and packers of fresh produce to preserve and enhance the freshness, quality and value of their produce.
Of late, the company has been seeing upward revisions in earnings estimates. Notably, over the past 60 days, the Zacks Consensus Estimate for 2016 earnings per share (EPS) has increased 20% to 42 cents.
ITT Educational Services Inc. ESI provides post-secondary degree programs in the U.S. It offers master, bachelor, and associate degree programs for students and short-term information technology and business learning solutions for career advancers and other professionals.
Upward estimate revisions on the stock raise optimism about its growth prospects. The Zacks Consensus Estimate for 2016 EPS has inched up 4.9% to 43 cents over the last 60 days.
Middletown, RI-based KVH Industries Inc. KVHI designs, develops, manufactures, and markets mobile communication products and services for the marine and land mobile markets in the Americas, Europe and Asia.
Upward estimate revisions for 2016 earnings add to the optimism over the stock. The Zacks Consensus Estimate for 2016 EPS has moved north by 13.6% to 25 cents over the last 60 days.
ConnectOne Bancorp, Inc. CNOB operates as the bank holding company for ConnectOne Bank that provides various banking products and services.
The company has been seeing upward earnings estimate revisions. Over the past 60 days, the Zacks Consensus Estimate for 2016 EPS has inched up 8.1% to $1.33.
Headquartered in New York, MSG Networks Inc. MSGN engages in media business in the U.S. It produces and develops content for various distribution platforms, including content from its venues.
Of late, the company has been seeing upward earnings estimate revisions. In fact, over the past 60 days the Zacks Consensus Estimate for 2016 EPS has increased 6.1% to $2.08.
Navios Maritime Holdings Inc. NM operates as a seaborne shipping and logistics company. The company focuses on transportation and transshipment of dry bulk commodities, including iron ore, coal, and grains.
Recently, the company’s earnings estimates were revised upward. The Zacks Consensus Estimate for 2016, though of a loss of 90 cents, has been revised by 31% over the last 60 days.
Evolving Systems Inc. EVOL, which is based in Englewood, CO, provides software solutions and services to the wireless, wireline, and cable markets in the U.K., Nigeria, Mexico, as well as internationally.
Upward estimate revisions for 2016 earnings add to the optimism over the stock. The Zacks Consensus Estimate for 2016 EPS has scaled 5.7% to 37 cents over the last 60 days.
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