4 US stocks that aren’t going to fall

The American stock market is not far from historic highs. Earlier, there was a wave of decline, and the risks remain.

Let’s take a look at the stocks that can show more resilience in the event of a drawdown in the US market.

To do this, we will sort the S&P 500 stocks according to three criteria.

1) Beta for three years less than 0.6. Beta – how much a stock rallies / falls when the S&P 500 rallies / falls by 1%.

2) The ratio of the consensus target/price is less than 0.9.

3) The PEG indicator is less than 3. PEG is the ratio of P / E and expectations for EPS dynamics. All other things being equal, beta less than one testifies in favor of buying securities.

We get four papers.

• Dollar General (DG) – American department store chain. As a chain of discounters, the cost of goods in stores is less than $ 10. The coronavirus pandemic has boosted demand for cheap goods. Refinitiv predicts a 9.1% annual average earnings per share growth over the next five years.

• Merck (MRK) is an American pharmaceutical company. Keytruda, a core drug (30% of 2020 revenue), is used to treat cancer. According to the forecast of top management, in 2021, a 12% increase in revenue is expected. The company organizes buybacks. The dividend yield of the securities is quite solid – 3.3% per annum.

• Activision Blizzard (ATVI) is a video game producer. In May, the company saw strong growth with its largest franchise companies: Call of Duty, World of Warcraft, and Candy Crush. She also confirmed plans to hire over 2,000 developers over the next year and triple the size of the teams working on the various franchises. According to the Refinitiv forecast, in the next 12 months. 9.5% annual average earnings per share growth.

• Vertex Pharmaceuticals (VRTX) is a biopharmaceutical company. The company expects positive prospects from CTX001, which it is developing with CRISPR Therapeutics. According to the forecast of top management, in 2021, an approximately 10% increase in EPS is expected.