News
Buy puts in weak stocks
Published
6 months agoon
By
admin
Goldman Sachs is recommending investors consider buying puts on a basket of companies with weak fundamentals as a way to hedge against a potential market pullback. “We see rising investor interest in hedging near-term drawdown risks given equity markets are near all-time highs,” strategists wrote in a note to clients Wednesday. “While the options market prices based on trailing volatility, fundamentals gain a new importance in a broader sell-off,” they said. Goldman believes free cash flow remains the most critical indicator of downside resilience. To capitalize on this dynamic, Goldman identified a number of sell-rated stocks that have low- or negative free cash flow yields and meaningful downside to analysts’ price targets. “Several of our long-term studies have shown that Free Cash Flow is the most important fundamental metric to track in order to understand the potential for downside asymmetry,” they wrote. “In down-markets we observe significantly less downside support for companies with low FCF yield.” The group spans sectors from travel to biotech and includes names such as Southwest Airlines , Avis Budget Group , JetBlue and Hertz Globa l. Goldman said puts on these stocks appear “attractive to buy for a pullback in equities,” particularly given the relatively low pricing of options implied volatility compared with historical levels in some cases. The strategists argue that while broader hedges like index puts can be expensive, single-stock options on companies with limited fundamental support can offer a more targeted and cost-efficient way to protect portfolios in a downturn. ( Learn the best 2026 strategies from inside the NYSE with Josh Brown and others at CNBC PRO Live. Tickets and info here . )
This industrial giant is emerging as a big AI play, says Wells Fargo
Novo Nordisk’s strategy tested as investors push back on board revamp
Alibaba plans AI subscriptions, stablecoin-like payments with JPMorgan
UK borrowing costs spike on report government to scrap plans to raise income tax
Trump’s threatened the BBC with a $1B lawsuit: Here’s what’s going on
UBS’s picks for global returns next year
Wells Fargo sees Caterpillar continuing to roar higher, emerging as an artificial intelligence play. The bank initiated shares of...
Flags with the logos of Danish drugmaker Novo Nordisk, maker of the blockbuster diabetes and weight-loss treatments Ozempic...
Key Points Alibaba plans to use “tokenization” of payments for cross-border transactions in its business-to-business arm. Kuo Zhang, president...
Rachel Reeves, U.K. chancellor of the exchequer, delivers a speech in London, UK, on Tuesday, Nov. 4, 2025. Bloomberg...
US President Donald Trump speaks to reporters as he arrives at Palm Beach International Airport on Oct. 31,...
Investors looking for global diversification opportunities should look to a specific subset of stocks in Europe, according to UBS...
Eakarat Buanoi | Istock | Getty Images LISBON, Portugal — Top tech executives told CNBC they’re concerned about...
Tan Su Shan, deputy chief executive officer and managing director of institutional banking at DBS Group Holdings Ltd., speaks during...
CHENGDU, CHINA – OCTOBER 18: People walk past the Louis Vuitton store at Taikoo Li, a high-end shopping area that...
The United States said Thursday it will remove tariffs on some foods and other imports from Argentina, Ecuador, Guatemala and...
