This story explains what BETA is, shares a list of 16 negative BETA stocks for the past year, then shares what it means to investors.
BETA is the measure of the systematic risk, or degree to which a stock moved as a multiple of the overall stock market. We measure this movement over a year, against the S&P 500 Index ETF.
A BETA of one implies a stock moved with the market, between zero and one means it moved with the market, but more slowly, and a BETA greater than one means a stock moved more aggressively, and in the direction of the market.
A stock with a negative BETA moved in the opposite direction of the market. It implies an inverse relationship between that stock and the market. It has zigged, when the market has zagged. It rose when the market fell, and vice versa.
There are very few stocks that move consistently against the market, because the market values the same thing in most stocks, profitability, growth and book values. The only logic could be that a company will make more money when the market falls (e.g., pawn shops, moving and storage companies, debt collection agencies). Negative BETA stocks are an anomaly. That’s why they say: “A Rising Tide Lifts All Boats.” It is why
When we find a persistently negative BETA stock, it deserves close analysis before investing. It may be a hedge for your portfolio. It also might be a company that has its own business cycle independent of the market. A good example is an oil company with a new discovery, and a bad example is a badly managed company falling despite a strong economy.
Take your time and study these stocks well before investing.
Here are the stocks and ETFs with negative BETA values, out of ~3,000 US-listed common stocks.
ADMP -0.073 Adamis Pharmaceuticals Corp
AKRO -0.538 Akero Therapeutics Inc
CANO -0.274 Cano Health Inc
CDTX -0.181 Cidara Therapeutics Inc
CLNN -0.241 Clene Inc
COR -0.004 Cencora Inc.
CPK -1.218 Chesapeake Utilities Corp
FI -0.179 Fiserv Inc.
FWONA -0.218 Formula One Group
FWONK -0.179 Liberty Media Corp.
RLMD -0.555 Relmada Therapeutics Inc
SBGI -0.237 Sinclair Inc
SDOT -0.315 Sadot Group Inc
SMMT -0.067 Summit Therapeutics Inc
UHAL -2.617 U-Haul Holding Company
VERU -0.365 Veru Inc