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May 14, 2022, 3:45 p.m. EDT

12 stocks to consider for the next leg of the bull market

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By Mark Hulbert

You may want to wait until the stock market turns up again before expending energy on trying to pick individual companies.

That’s because, during bear markets, almost all stocks become correlated with the market. Only once a new bull market starts do correlations fall, and that’s when you have relatively good odds of picking stocks that will beat the market averages.

To illustrate how correlations vary with the market cycle, consider the bear-market bottom in March 2020, at the end of the waterfall decline that accompanied the initial stages of the Covid-19 pandemic. The S&P 500 Index /zigman2/quotes/210599714/realtime SPX -0.34% hit its low on March 23 of that year, and most individual stocks did as well. In fact, based on my analysis of FactSet data, the median stock in the S&P 1500 Index — consisting of large-, mid- and small-cap stocks — declined to its bear-market low within five days of March 23. That’s a narrow range.

A broader range existed at the bull-market top earlier this year. Though the S&P 500 rose to a record closing high Jan. 3, many individual stocks did the same long before or after. In fact, the median stock in the S&P 1500 topped out 55 days away from Jan. 3 — as early as Nov. 9, 2021 or as late as Feb. 27 of this year. This range is more than 10 times wider than at the March 2020 bottom.

We don’t know when a new bull market will begin, needless to say. As this is written, the S&P 500 is 18.1% below its early-January high , just shy of the 20% loss threshold that’s usually considered a bear market. The market could very well continue to decline, perhaps significantly, and so long as the trend is down, it’s a good bet that the stocks you pick will march to the beat of a similar drummer.

But it’s not too early to start building your buy list, in anticipation of when the major trend does turn back up. To assist you in that process, I constructed the following table of stocks that are uncorrelated with the overall stock market.

To do so, I started with a list of stocks that are currently recommended for purchase by at least two of the top-performing newsletters monitored by my performance-auditing firm. I then sorted them according to their betas — a statistical measurement of the degree to which a stock historically has moved up or down with the market as a whole.

The table below contains the dozen such stocks with the lowest betas; they are listed in ascending order of their betas.

Stock Beta # newsletters currently recommending for purchase
ZimVie Inc. /zigman2/quotes/233006124/composite ZIMV 0.11 2
Clorox Co. /zigman2/quotes/206443229/composite CLX 0.26 2
General Mills Inc. /zigman2/quotes/206659526/composite GIS 0.37 2
Moderna Inc. /zigman2/quotes/205619834/composite MRNA 0.41 2
Verizon Communications Inc. /zigman2/quotes/204980236/composite VZ 0.46 2
Procter & Gamble Co. /zigman2/quotes/202894679/composite PG 0.59 2
Merck & Co. Inc. /zigman2/quotes/209956077/composite MRK 0.60 3
Altria Group Inc. /zigman2/quotes/208895754/composite MO 0.60 2
Bristol Myers Squibb Co. /zigman2/quotes/202559280/composite BMY 0.60 2
Johnson & Johnson /zigman2/quotes/201724570/composite JNJ 0.61 2
Pfizer Inc. /zigman2/quotes/202877789/composite PFE 0.62 3
PetMed Express Inc. /zigman2/quotes/203606847/composite PETS 0.63 2

Mark Hulbert is a regular contributor to MarketWatch. His Hulbert Ratings tracks investment newsletters that pay a flat fee to be audited. He can be reached at mark@hulbertratings.com .

/zigman2/quotes/210599714/realtime
US : S&P US
3,808.68
-12.87 -0.34%
Volume: 910.62M
June 29, 2022 12:18p
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/zigman2/quotes/233006124/composite
US : U.S.: Nasdaq
$ 16.75
-0.22 -1.30%
Volume: 68,718
June 29, 2022 12:16p
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
$442.58 million
Rev. per Employee
N/A
loading...
/zigman2/quotes/206443229/composite
US : U.S.: NYSE
$ 138.83
+1.89 +1.38%
Volume: 251,999
June 29, 2022 12:17p
P/E Ratio
37.71
Dividend Yield
3.34%
Market Cap
$16.85 billion
Rev. per Employee
$815,667
loading...
/zigman2/quotes/206659526/composite
US : U.S.: NYSE
$ 74.43
+4.17 +5.94%
Volume: 5.13M
June 29, 2022 12:18p
P/E Ratio
19.96
Dividend Yield
2.73%
Market Cap
$42.31 billion
Rev. per Employee
$517,914
loading...
/zigman2/quotes/205619834/composite
US : U.S.: Nasdaq
$ 141.94
-0.25 -0.18%
Volume: 1.61M
June 29, 2022 12:18p
P/E Ratio
4.20
Dividend Yield
N/A
Market Cap
$56.56 billion
Rev. per Employee
$6.82M
loading...
/zigman2/quotes/204980236/composite
US : U.S.: NYSE
$ 50.72
+0.26 +0.52%
Volume: 3.98M
June 29, 2022 12:18p
P/E Ratio
9.89
Dividend Yield
5.04%
Market Cap
$211.91 billion
Rev. per Employee
$1.13M
loading...
/zigman2/quotes/202894679/composite
US : U.S.: NYSE
$ 141.62
+0.70 +0.49%
Volume: 1.54M
June 29, 2022 12:18p
P/E Ratio
24.82
Dividend Yield
2.57%
Market Cap
$338.11 billion
Rev. per Employee
$753,644
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/zigman2/quotes/209956077/composite
US : U.S.: NYSE
$ 92.08
+0.19 +0.21%
Volume: 3.55M
June 29, 2022 12:18p
P/E Ratio
16.51
Dividend Yield
2.99%
Market Cap
$232.37 billion
Rev. per Employee
$719,221
loading...
/zigman2/quotes/208895754/composite
US : U.S.: NYSE
$ 41.86
-1.33 -3.08%
Volume: 4.87M
June 29, 2022 12:18p
P/E Ratio
25.55
Dividend Yield
8.58%
Market Cap
$78.20 billion
Rev. per Employee
$3.52M
loading...
/zigman2/quotes/202559280/composite
US : U.S.: NYSE
$ 78.15
-0.55 -0.70%
Volume: 3.37M
June 29, 2022 12:18p
P/E Ratio
27.79
Dividend Yield
2.76%
Market Cap
$167.56 billion
Rev. per Employee
$1.44M
loading...
/zigman2/quotes/201724570/composite
US : U.S.: NYSE
$ 177.41
+0.47 +0.26%
Volume: 2.84M
June 29, 2022 12:18p
P/E Ratio
23.97
Dividend Yield
2.54%
Market Cap
$465.60 billion
Rev. per Employee
$661,665
loading...
/zigman2/quotes/202877789/composite
US : U.S.: NYSE
$ 50.91
+0.25 +0.49%
Volume: 4.63M
June 29, 2022 12:18p
P/E Ratio
11.72
Dividend Yield
3.13%
Market Cap
$284.25 billion
Rev. per Employee
$1.03M
loading...
/zigman2/quotes/203606847/composite
US : U.S.: Nasdaq
$ 20.41
-0.52 -2.48%
Volume: 99,145
June 29, 2022 12:17p
P/E Ratio
19.74
Dividend Yield
5.87%
Market Cap
$439.28 million
Rev. per Employee
$1.29M
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About Mark Hulbert

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Mark Hulbert is editor of the Hulbert Financial Digest, which since 1980 has been tracking the performance of hundreds of investment advisors. The HFD...

Mark Hulbert is editor of the Hulbert Financial Digest, which since 1980 has been tracking the performance of hundreds of investment advisors. The HFD became a service of MarketWatch in April 2002. In addition to being a Senior Columnist for MarketWatch, Hulbert writes a monthly column for Barron’s.com and a column on investment strategies for the Journal of the American Association of Individual Investors. A frequent guest on television and radio shows, you may have seen Hulbert on CNBC, Wall Street Week, or ABC’s World News This Morning. Most recently, Dow Jones and MarketWatch launched a new weekly newsletter based on Hulbert's research, entitled Hulbert on Markets: What’s Working Now.

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