5 Low Leverage Stocks to Buy Amid Tensions in the Middle East

Market Overview - The majority of U.S. stocks closed lower on April 15 due to investor skepticism regarding renewed hostilities between Iran and Israel and a rise in Treasury yields, with the 10-year U.S. Treasury note reaching its highest level since November [1] - Despite better-than-expected U.S. retail sales data for March, the broader market experienced a decline [1] Investment Strategy - In the current market environment, it is suggested that investors consider buying low-leverage stocks as a safer investment strategy [1][3] - Low-leverage stocks are defined as those with a debt-to-equity ratio lower than their industry peers, which can help mitigate risks during economic downturns [5][6] Leverage and Its Implications - Leverage refers to the practice of companies borrowing capital to operate and expand, typically through debt financing [2] - Excessive debt financing can lead to significant losses, making it crucial for investors to avoid companies with high debt levels [2][4] Stock Selection Criteria - The recommended criteria for selecting low-leverage stocks include: - Debt/Equity ratio less than the industry median [6] - Current price of at least $10 [6] - Average 20-day volume of at least 50,000 [7] - Earnings per share (EPS) growth greater than the industry median [7] - VGM Score of A or B combined with a Zacks Rank of 1 (Strong Buy) or 2 (Buy) [7] - Estimated one-year EPS growth greater than 5% [7] Recommended Stocks - Freshpet (FRPT): Focuses on natural fresh foods for pets, with a four-quarter average earnings surprise of 61.83% and a Zacks Rank of 2. The 2024 sales estimate suggests a 24.3% improvement from 2023 [8] - AptarGroup (ATR): A supplier of innovative packaging solutions, with a long-term earnings growth rate of 7% and a Zacks Rank of 2. The 2024 sales estimate indicates a 4% improvement from the previous year [9] - Montrose Environmental Group (MEG): Provides environmental services, with a four-quarter average earnings surprise of 16% and a Zacks Rank of 2. The 2024 sales estimate implies a 13.8% increase over 2023 [10] - The Greenbrier Companies (GBX): Offers a range of social and medical services, with a Zacks Rank of 1 and a long-term earnings growth rate of 7%. The 2024 earnings estimate has improved by 8.1% over the past 60 days [11] - PDD Holdings (PDD): An e-commerce platform with a long-term earnings growth rate of 49.3% and a Zacks Rank of 1. The 2024 sales estimate suggests a 50% improvement from 2023 [12]