Traders want defensive stocks; Tech can deliver

Traders want defensive stocks; Tech can deliver

As the stock markets gyrate around the downward slope, some traders use bear market rallies and upticks to sell; many others exploit these opportunities to load their portfolios with defenses. Trading Platforms can help their users with the task of finding the most exciting opportunities within the defensive plays. Hint: defensive stocks don’t have to be only “boring” Utilities or Consumer staples. Believe it or not, there are defensive stocks in the Technology space!

Traders need to build defenses against the market’s swings

The current economic climate is fraught with many uncertainties and challenges, but investors can find comfort in defensive stocks which offer protection from the worst threats of market volatility. 

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Defensive stocks are shares of companies with a market cap of more than US$1B, strong financial health, modest PE ratios, past earnings growth and paying a dividend.

When we say “defensive stocks”, first thing that comes to mind is usually stocks that belong to sectors such as utilities, consumer staples, and healthcare - companies that enjoy strong and relatively inelastic consumer demand, no matter what the economic situation. These companies also often pay dividends, which makes them even more enticing during market downturns as they offer stable income.

Can Technology stocks offer defense against market’s declines?

At the moment, solid stocks are the best bets - but the list of these needs to be updated. Times have changed, and now defensives, like everything else around us, should include a component of Technology.

There are large, stable and resilient Tech companies with solid business models and great fundamentals which are expected to help them get through the economic hard patch unscathed, while they continue to grow their market share. 

Many of these firms have grown into massive multinational businesses that have a major influence on our everyday life. Some dominate their respective business spaces, such as semiconductors, smartphones, e-commerce, cloud computing and more. They also have plenty of cash on hand, which means they may be in better shape to withstand an economic slowdown than their smaller competitors.

And they also pay dividends - which was almost unheard of among the Tech until a short while ago - so that their shareholders enjoy both growth AND income.

Trading Platforms: help your users build armored portfolio

When choosing stocks whose role is to defend your portfolio from the storm, it’s more important than ever to look into fundamentals. True, not all traders have enough knowledge, experience and time to do this research. That’s where our AI-powered research tool comes to the rescue.

Our genius AI has already examined thousands of stocks, filtering for balance strength, profitability, dividend yields and valuations - and came up with a number of stocks that offer investors a good hedge in the current market situation. 

Company Country Market Cap P/E (vs Industry) EBITDA Margin Dividend Rating Report
Texas Instruments (TXN) US $143.8B 17.6 (18.4) 56.1% 2.95% Buy
Micron Technology (MU) US $65.3B 5.2 (18.4) 54.7% 0.68% Strong Buy
Cisco Systems, (CSCO) US $182.6B 15.6 (21.9) 31.2% 3.4% Buy
Oracle Corp. (ORCL) US $188.4B 26.3 (39.3) 44.0% 1.81% Buy
Amdocs (DOX) US $10.4B 19.2 (28.2) 19.1% 1.86% Buy
Samsung Electronics (A005930) South Korea $309.2B 8.4 (9.2) 31.3% 2.46% Buy
Open Text Corp. (OTEX) Canada $10.6B 21.2 (39.3) 28.7% 2.2% Buy
HCL Technologies  (HCLTECH) India $34.3B 16.3 (26.1) 23.2% 3.2% Buy
NEC Corp. (6701) Japan $10.5B 10.2 (17.4) 10.4% 2.1% Buy
BT Group plc (BT.A) UK $23.4B 14.7 (14.8) 29.7% 5.8% Strong Buy

Who said Tech is only about future growth promises? There are Tech stocks that can deliver - and they are now sold at bargain prices. As you can see, these great Tech stocks prove that Technology can be a solid, defensive investment, weather-proofing your traders’ portfolios.

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