MILLBURN, N.J. (Stockpickr) -- In a perfect world, we would seek the maximum amount of return with the least amount of risk. In the real world, many might see that as a fool's errand. I believe, though, that we can put together a portfolio of stocks that will give us excellent potential return, at a cheap valuation with a minimum amount of risk.
With that in mind, I scanned for stocks that met two criteria. First, I sought out stocks with historical volatilities below that of the S&P 500 over the course of the last year; the one-year realized or actual volatility for the S&P 500 is 23.25%. Second, I sought out stocks with PEG ratios that were below 1.3. I used 1.3 as a reasonable measure of good value. As you might know, stocks with a PEG of below 1 are extremely cheap, and those over 2 are too risky or overpriced.
From the resulting stocks, I eliminated those companies that I believed did not meet my normal fundamental criteria for an investment. What was left were five low-volatility, low-PEG stocks suitable for investment.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV