Play it safe with these stocks that rise when Wall Street is volatile
As market uncertainty increases with the ongoing banking crisis, investors may look for certain stocks to beat the Street when there are stressful conditions. Investor confidence has wavered since the collapse of Silicon Valley Bank and Signature Bank. The Cboe Volatility Index (VIX), Wall Street’s preferred gauge of fear, hit a level not seen since late 2022 and edged into territory considered very risky. The volatility index has already risen seven points this month, putting it on pace for one of the biggest jumps in 10 years if the trend continues. To find volatility winners, CNBC Pro checked for stocks that tend to rise when the volatility index rises. This is not normal as most stocks fall when fear is high on Wall Street and the VIX spikes. We reviewed the 1,500 largest US stocks and looked at their performance during the 10 largest monthly moves up in the VIX over the past 10 years. These stocks averaged gains of at least 1% during those months when volatility spiked. What came back were stocks that have stable businesses with stable cash flows. Companies sell things like beer, food and electricity. Utility company PG&E made the list of biggest gainers amid volatility on the Street, with an average gain of 4.6%. Analysts are bullish on PG & E shares, with eight out of 13 analysts covering the stock giving it a buy rating. The average price target for the stock is $18.73, suggesting a 17.8% upside from Friday’s close. Shares have fallen 2% in 2023, but are up nearly 42% over the past 12 months. The two energy groups on the list are Coterra Energy and EQT. Coterra Energy has the highest average gain of 4.6% on the list. The stock was flat in 2023, while gaining 6% over the 12-month period. Beer maker Molson Coors is another stock that beats the market during times of volatility. Shares are up 1.6% year-to-date and up 3% over the past 12 months. Meanwhile, analysts are mixed on the stock – with the majority of those covering the stock issuing a hold rating – and expect the stock to gain 4.6%. Other brands on the list include Bath & Body Works, JM Smucker, Flowers Foods and Stride. Bath & Body Works had an average increase of 2.3%. Its shares have fallen 12% so far in 2023 amid a 20.3% decline over the past 12 months. Still, analysts think the stock is a buy, and estimate nearly 39% growth this year. — CNBC’s Michael Bloom contributed to this report.