Cheap volatility stocks that would come afloat in case of a recession – Barclays

Barclays analysts put forward a list of recession resilient stocks.

Analyst Anshul Gupta said that among the concerns for U.S. equities for the rest of the year are the fears of a recession and economic downturn.

The following stocks have daily average option notional volumes of more than $5M. They also have a large potential for an upside – measured by the distance from their one-year high and normalized by the three-month realized volatility.

Lastly, these stocks have the lowest volatility scores, measured by the average of the two-year percentile across the three-month at-the-money implied volatility spread, both compared to the realized volatility and the sector volatility.

Within technology (XLK)

• Nutanix (NTNX) – 3-month ATM implied volatility: 39%; Volatility score: 4%; Distance from one-year high: -18%
• Oracle (ORCL) – 3-month ATM implied volatility: 24%; Volatility score: 4%; Distance from one-year high: -3%

Within industrials (XLI)

• Deere (DE) – 3-month ATM implied volatility: 28%; Volatility score: 13%; Distance from one-year high: -5%
• Axon Enterprise (AXON) – 3-month ATM implied volatility: 19%; Volatility score: 30%; Distance from one-year high: -4%

Within discretionary (XLY)

• TJX Companies (TJX) – 3-month ATM implied volatility: 33%; Volatility score: 2%; Distance from one-year high: -1%
• McDonald’s (MCD) – 3-month ATM implied volatility: 25%; Volatility score: 50%; Distance from one-year high: -5%

Within health care (XLV)

• Zoetis (ZTS) – 3-month ATM implied volatility: 19%; Volatility score: 20%; Distance from one-year high: -2%

Within financials (XLF)

• Visa (V) – 3-month ATM implied volatility: 18%; Volatility score: 62%; Distance from one-year high: -2%