Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your experience. Save up to 40% More details

Here's How To Play Stocks As US-Iran Tensions Mount

By Zacks Investment ResearchStock MarketsJan 06, 2020 07:35AM ET
Here's How To Play Stocks As US-Iran Tensions Mount
By Zacks Investment Research   |  Jan 06, 2020 07:35AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items

Over the weekend, Iran and the United States traded threats after a top Iranian general was killed in a U.S. airstrike at Baghdad’s airport. Iran confirmed that it won’t any longer abide by the limits contained in the 2015 nuclear deal. Iraq’s Parliament has also asked for the removal of all American troops from Iranian soil.

President Trump, in the meanwhile, threatened possible “disproportionate” attacks if Iran strikes back. Trump also threatened sanctions against Iran provided it expels U.S. troops, adding to his earlier comments to target Iranian cultural sites if Iran retaliates.

Intensifying of the Middle-East conflict has undoubtedly affected the U.S. stock market. While all the major benchmarks ended in the red on Jan 3, the Dow in particular registered its worst day in four weeks. And expectations that Iran may retaliate may lead to further volatility in the market in the near term.

But stock market investors shouldn’t panic at all. Let’s admit, Friday’s losses didn’t even erase Thursday’s gains. Needless to say, stocks have been on a tear last year, with major bourses hitting a series of record highs. And 2020 is surely building hopes, thanks to improving economic data, U.S.-China trade truce and USMCA trade deal to replace NAFTA.

What’s more, historically, the broader stock market’s average return has mostly been positive in the 12 months following any geopolitical uncertainty. Take a look —

(Source: Bloomberg, L. P. and

In such a scenario, investing in low-beta companies seems prudent. Since we do expect at least short-term volatility, low-beta stocks are the best choice as they are less correlated to the index and thus tend to be less volatile. In this case, a low beta ranges from 0 to 1.

But eventually, the broader market will start gaining, which calls for investing in stocks that also have the propensity to grow in the near term. This way, an investor can earn risk-adjusted returns. Hence, some of the best choices are as follows —

Agile Therapeutics, Inc. (NASDAQ:AGRX) focuses on the development and commercialization of prescription contraceptive products for women. The company currently has a Zacks Rank #2 (Buy) and a beta of 0.75. At the same time, the company’s expected earnings growth rate for the current year is 37.9%, more than the Medical - Generic Drugs industry’s projected rise of 12.3%.

Ares Capital Corporation (NASDAQ:ARCC) is a business development company specializing in acquisition, recapitalization, mezzanine debt, restructurings, rescue financing, and leveraged buyout transactions of middle market companies. The company currently has a Zacks Rank 2 and a beta of 0.58. In fact, the company’s expected earnings growth rate for the current year is 13.1% versus the Financial - SBIC & Commercial industry’s estimated rise of 0.5%.

Cable One, Inc. (NYSE:CABO) owns and operates cable systems that provide data, video, and voice services. The company currently has a Zacks Rank #1 (Strong Buy) and a beta of 0.43. Also, the company’s expected earnings growth rate for the current year is 9.1%, more than the Cable Television industry’s projected rise of 3.1%. You can see the complete list of today’s Zacks #1 Rank stocks here.

Fears of retaliation following the top Iranian commander’s death have lifted oil prices. After all, any threat could affect supplies of crude oil through the Strait of Hormuz. Nearly 22.5 million barrels of oil pass through the Strait of Hormuz each day since the beginning of 2018, which is roughly 24% of the world’s daily oil production. So, any disruption can lead to supply-demand disparity, eventually leading to elevated oil prices.

West Texas Intermediate crude was up almost 2% late Sunday, while the global benchmark, Brent crude inched past the $70-a-barrel mark. And with oil prices going up, shares of energy players including bigwig oil producers, rig operators and pipeline owners have followed suit.

Hence, adding a solid energy player to your portfolio that can make the most of this bullish oil market seems judicious.

Notable among them is Evolution Petroleum Corporation (NYSE:EPM) that engages in the development, production, ownership, and management of oil and gas properties in the United States. The company has a Zacks Rank 2. To top it, the company, which is part of the Oil and Gas - Exploration and Production - United States industry, is expected to post healthy earnings growth of 14.3% in the next quarter.

And as crude oil prices move north, prices of essential goods and commodities increase. And value of gold rises when inflation picks up. After all, it acts as a hedge against inflation. In fact, theoretically, more than 60% of the time, gold and crude oil have a direct relationship. Thus, with oil prices moving north, shares of gold mining companies are poised to gain traction.

Prominent gold mining company in the United States is Royal Gold, Inc. (NASDAQ:RGLD) . The company currently has a Zacks Rank 2. The company’s expected earnings growth rate for the current year is almost 69%, higher than the Mining - Gold industry’s projected rise of 20.8%.

More Stock News: This Is Bigger than the iPhone!

It could become the mother of all technological revolutions. Apple (NASDAQ:AAPL) sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.

Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.

Click here for the 6 trades >>

Cable One, Inc. (CABO): Free Stock Analysis Report

Ares Capital Corporation (ARCC): Free Stock Analysis Report

Agile Therapeutics, Inc. (AGRX): Free Stock Analysis Report

Royal Gold, Inc. (RGLD): Free Stock Analysis Report

Evolution Petroleum Corporation, Inc. (EPM): Free Stock Analysis Report

Original post

Zacks Investment Research
Here's How To Play Stocks As US-Iran Tensions Mount

Related Articles

Tim Knight
Lemonade Sours By Tim Knight - Dec 03, 2021 2

Remember Lemonade Inc (NYSE:LMND)? The company that, at the start of this year, was worth more than IBM (NYSE:IBM)? Yeah, that Lemonade. The company none of us had heard of. Let’s...

Craig Erlam
Dip Buying Short Lived By Craig Erlam - Dec 03, 2021

Friday’s dip buying is not proving particularly lucrative for European investors as stocks have given back earlier gains to trade broadly flat on the day. Given the seesaw price...

Here's How To Play Stocks As US-Iran Tensions Mount

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at’s discretion.

Write your thoughts here
Are you sure you want to delete this chart?
Post also to:
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Are you sure you want to delete this chart?
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
Sign up with Email