Top Five Risky Stocks of S&P 500 Index; Quick Overview of Beta – AIG, GNW, HIG, WYN, PFG

  on Dec 07,2012 Posted in Finance ,Investment Ideas
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Beta is a measure of a security’s price volatility in relation to the whole market. On the other hand we can simply define that beta shows how does the stock price change in relation to the whole market.

Beta values are also described as Beta coefficients. Beta values are used by few investors to gauge the movement of a stock and to help assess the risk involved when putting together an investment portfolio.

Beta value is measured by using historic share price and market index data, offering a sign of the past sensitivity of a stock to market falls and rises.

Securities that have a beta over 1 have higher price volatility than the overall market and are considered as more risky. Securities with beta value of 1 fluctuate in price at the same rate as the market. However, securities with a beta of below 1 have less price volatility than the market and considered as less risky.

In this article we will discuss top five S&P 500 components with higher beta values. Earlier we discussed worst year to date performers of technology.

American International Group, Inc (NYSE:AIG) offered 28.82% return on equity while the blue chip company has 5.01% value in Return on Assets. Financial giant has the market capitalization of 49.10 billion while its P/E ratio of 2.31. Beta value for the bank is 3.44, which is higher among all S&P 500 stocks. Institutional ownership of the financial company was 70% while its 1.48 billion shares were outstanding. Company’s shares were moving ahead of 20 days simple moving average with 2.70% while lagging behind SMA 50 with -1.51%.

Genworth Financial Inc (NYSE:GNW) has market capitalization of 3.15 billion and offered 1.92% Return on equity.  The company has institutional ownership of 76% while its price to earnings ratio was 10.58. PEG ratio, which also measures growth, was 0.66. Net profit margin of Genworth Financial was 4.29% while operating profit margin was 5.46%.Beta value for the financial company was booked as 3.08.

Hartford Financial Services Group Inc (NYSE:HIG) has market capitalization of 9.44 billion while its Price to earnings ratio was 22.56. Hartford Financial has a beta value of 3.00. HIG offered earning per share of 0.96 and its 436.31 million shares were outstanding while the 95% shares were owned by institutional investors. The company has return on equity ratio of 2.15% while return on assets was 0.17%.

Wyndham Worldwide Corporation (NYSE:WYN) has 2.92 beta value, which is a measure of risk. The Wyndham Worldwide has return on equity ratio of 16.90% while its return on investment ratio was 4.91%. Net profit margin of the company was 8.42%. The company has market capitalization of $6.96 billion while its EPS was 2.55.  Shares of the company were lagging behind its SMA 50 with -3.82% while SMA 20 with -0.29%.

Principal Financial Group Inc (NYSE:PFG) has market capitalization of 8.132 billion while offered P/E ratio of 11.68. The Beta factor, which is used as a measure of a company’s volatility in relation to the market, was 2.75 while the PEG ratio of the stock was 0.93. PFG has ROE ratio of 7.325% while ROA value remained 0.51%.

Disclosure: The views and opinions expressed in this article are exclusively those of the authors who have no stake in any stocks mentioned, and hold no plan to acquire any stake within the next 5 days.



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