We recently published a list of 8 Best Low Volatility Stocks To Buy Right Now. In this article, we are going to take a look at where Walmart Inc. (NYSE:WMT) stands against other best low volatility stocks to buy right now.
The market has shown strong performance overall, with the S&P 500 up nearly 26% year to date. However, in the past thirty days, it has experienced a slight decline of 1%. A notable sell-off occurred between December 17 and 19, which contributed to some volatility. Since then, the market has been fluctuating, with prices rising and falling as investors continue to navigate the uncertainty.
Optimism for High Growth Despite High Rates and Debt
In a CNBC interview, Alan Rechtschaffen, Senior Portfolio Manager at UBS Global Wealth, stressed that he maintains a positive outlook on market growth, emphasizing that the current market sell-off is driven by a lack of faith rather than fundamental issues. He noted that the positivity surrounding the market will improve as President Trump’s policies take effect.
Rechtschaffen acknowledged concerns over high interest rates and high debt levels but argued that the Fed’s goal of lowering rates, combined with efforts to reduce spending and increase efficiency, will lead to high growth. He is particularly optimistic about sectors like technology, utilities, and financials, which he believes will benefit from a focus on new energy sources and deregulation. Although valuations are higher than usual, Rechtschaffen believes that with the right efficiencies in place, the market could see a 10% rise, offering opportunities for investors willing to take risks in this promising period.
Fed’s Shifting Rate Path Sparks Concerns in the Market
The path of rate cuts in 2025 is creating uncertainty for Wall Street as the Fed’s outlook shifted last week, now forecasting two cuts instead of four. The possibility of a rate hike has not been ruled out if inflation re-accelerates. San Francisco Fed President Mary Daly told Yahoo Finance’s Brian Sozzi that adjustments could be made depending on data, but she doesn’t see inflationary pressures at the moment. However, she isn’t ruling out anything.
On Yahoo Finance’s Catalysts, Max Wasserman of Miramar Capital said that he believes the economy is stronger than anticipated, with GDP growth around 3% and inflation at 2.7%, which reduces the need for aggressive rate cuts. He also suggested that a rate hike could become more likely in the second half of 2025 if inflation remains persistent.
Wasserman advised a more cautious approach in portfolio management, favoring de-risking strategies, such as taking profits from top-performing stocks and focusing on dividend stocks. He also recommended staying short-term on bonds, as rising interest rates could pressure longer-duration bonds. Additionally, he expressed concerns about potential inflationary policies from the incoming administration, such as changes to immigration or tariffs, which could further strain the economy and complicate the Fed’s path forward.
Our Methodology
For this article, we used the Yahoo Finance stocks screener to identify 30 companies with the largest market cap and a 5-year beta (monthly) between 0.2 and 0.8. Next, we narrowed our list to 8 stocks most widely held by institutional investors. The 8 best low-risk stocks to buy are listed in ascending order of their hedge fund sentiment.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
A manager standing in a hypermarket, pointing out items available for wholesale.
Walmart Inc. (NYSE:WMT)
5-year Beta (Monthly): 0.52
Number of Hedge Fund Holders: 88
Walmart Inc. (NYSE:WMT) is a major player in the retail industry, known for offering a broad range of products that meet the varied needs of consumers. Despite the challenges posed by an inflationary environment, the company has performed well, thanks in large part to its strength in the grocery sector and its ability to take advantage of economies of scale.
As its business model evolves, the company has been able to improve its margins by diversifying its offerings. In the third quarter, the company saw its global e-commerce losses continue to narrow, with notable progress in Walmart U.S. The company’s improved business mix contributed to this positive trend, and there has been significant progress in enhancing core e-commerce margins.
Over the past year, Walmart (NYSE:WMT) stock has experienced a remarkable increase, rising by more than 75%. A key factor behind this growth has been the company’s focus on expanding its digital capabilities. E-commerce, which is becoming an increasingly crucial part of Walmart’s business, has allowed the company to tap into higher-margin opportunities. In the third quarter, the company saw a 27% increase in e-commerce sales, further supporting its ongoing success.
Walmart (NYSE:WMT) has also made notable progress in enhancing its delivery services, giving it a competitive edge. In the third quarter, U.S. delivery sales outpaced in-store sales growth. Store-fulfilled deliveries rose nearly 50%, surpassing a $2.5 billion monthly run rate. The company has now achieved 12 consecutive months with deliveries exceeding $2 billion.
Overall, WMT ranks 5th on our list of best low volatility stocks to buy right now. While we acknowledge the potential of WMT as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than WMT but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
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