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MKM's Jon Krinsky: Buy Low Volatility Stocks, Sell High Beta Stocks

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MKM's Jon Krinsky: Buy Low Volatility Stocks, Sell High Beta Stocks
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After the worst opening week for the S&P 500 in history, MKM Partners analyst Jonathan Krinsky now believes that traders should be ditching high-volatility stocks in favor of safer, low-beta names. The S&P 500 dropped nearly 6.0 percent in the first week of 2016 trading, its largest weekly decline since 2011.

According to Krinsky, the market is likely now oversold in the short-term, as the S&P 500 currently has less than 4.0 percent of its components above their 10-day simple moving average.

“This should set up a bounce early this week, but with the primary trend shifting from neutral to bearish in our view, we are more interested in selling into strength than buying weakness,” he explains.

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Among the bullish low-volatility stocks that Krinsky names in the report are Kellogg Company (NYSE: K), The Coca-Cola Co (NYSE: KO) and AT&T Inc. (NYSE: T).

MKM’s bearish high-volatility names include Affiliated Managers Group, Inc. (NYSE: AMG), Helmerich & Payne, Inc (NYSE: HP) and United Rentals, Inc. (NYSE: URI).

Disclosure: the author holds no position in the stocks mentioned.

Latest Ratings for AMG

DateFirmActionFromTo
Aug 2017Credit SuisseMaintainsOutperform
Nov 2016Deutsche BankDowngradesBuyHold
Oct 2016JefferiesMaintainsBuy

View More Analyst Ratings for AMG
View the Latest Analyst Ratings

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