3 Volatility-Tolerant Stocks with Solid Financials

Last week was a veritable rollercoaster in the markets, and saw days which marked some of the biggest swings in the S&P 500 and Dow Jones Industrial Average — ever.

It’s no big secret that the unpredictable (some would say erratic) approach that the White House has taken toward the tariff war is the key contributor to current market volatility. 

In environments such as these, just finding your footing to make a well-thought-out thesis can be a tall order.

Why a Strong Financial Standing Is More Important Than Ever

Bull market or bear market, there’s something investors can reasonably rely on: Companies with strong Financials.

In good times, a solid balance sheet allows businesses to finance key expansion or growth initiatives. In bad times, it helps them thrive while others struggle to survive. 

Let’s take a look at some stocks that fit the bill.

All of the below picks have an overall Zen Rating of A as well as a Financials Component Grade rating of A. They also all have bullish 12-month forecasts from top-rated analysts and above-average ratings when it comes to Growth and/or Safety. 

3 Stocks with Solid Financials

1. CSG Systems International (NASDAQ: CSGS)

Billing, customer management, revenue tracking. CSGS doesn’t have these problems — rather, it offers the solutions to them.

The company’s primary clientele hails from the telecommunications industry, but it also serves the financial services, healthcare, and insurance sectors — with a smattering of public sector-related work as well.

At present, CSGS stock is the 2nd highest rated equity in an A-rated industry: Software Infrastructure.

That’s not all CSGS has going for it. 

As a stock with a Zen Rating of A, it belongs to a class of securities that have provided an average annual return of 32.52% since the early 2000s. Presently, the average 12-month price forecast for CSGS shares stands at $71.67, implying 22.76% potential upside.

The Street-high price target of $80, set by Northland Securities researcher Nehal Chokshi (a top 15% rated analyst), would, if met, equate to a 37.03% rally. 

Looking at the Component Grades that shape the overall Zen Rating, CSG gets an A for Financials, ranking in the top 4% of the equities we track.

CSGS ranks in the 94th percentile for Growth, indicating both solid free cash flow momentum, as well as strong short-term sales acceleration and projected EPS growth.

Lastly, there’s Safety — a Component Grade rating in which CSG Systems shares rank in the 89th percentile. The Safety rating gives us a view into the predictability of core operational metrics — and in unpredictable times, this is a foundational strength. 

Coupled with the fact that services seem to be exempt from the smouldering exchange of tariff salvos — at least for the time being, CSGS stock appears quite compelling at a modest price-to-earnings (P/E) ratio of 19.08x.

2. Harmonic (NASDAQ: HLIT)

This company is not a household name, yet its reach extends into hundreds of millions of American homes.

HLIT is a behind-the-scenes player that makes things like video streaming and broadband internet as readily available as they are. Harmonic counts the likes of AT&T, Comcast, and Vodafone as its customers.

Like the previous pick, it’s in an A-rated industry. 

Analysts are also upbeat about the stock’s potential — at writing, the average 12-month forecast suggests 38.1% potential upside.

For example, Rosenblatt’s Steve Frankel (a top 8% rated analyst) recently set a $12 price target, which would represent a 36.67% rally from current prices.

HLIT stock also ranks in the top 4% of stocks we track for Financials. 

It’s also in the top 5% of the stocks we track for Growth. 

To top it all off, positive analyst coverage and three earnings beats in a row have placed Harmonic Inc stock in the top 8% of equities according to Sentiment.

Not only does HLIT have stellar fundamentals, but it’s also a business less likely to be impacted by retaliatory trade measures.

3. Valmont Industries (NYSE: VMI)

Here’s another under-the-radar pick — a manufacturer of essential, structural hardware ranging from transmission poles to highway signage and street lights.

Why under-the-radar? For one, VMI is covered by only two analysts. 

One recently downgraded the stock to a Hold (hold your horses, if you’re worried), while the other maintains a Strong Buy rating. 

Here’s the interesting part — the former is DA Davidson’s Brent Thielman (a top 2% rated analyst), whose $380 price forecast implies a 36.61% upside. The latter is Stifel Nicolaus researcher Nathan Jones (also a top 2% rated analyst), and his $425 price target implies a 52.79% upside. 

The balance sheet is one of the chief reasons why some of Wall Street’s finest have given VMI their seal of approval. Margins have more than doubled compared to last year, having increased from 3.6% to 8.5%. 

Valmont Industries also maintains a staggering $1.6 billion (yes, with a B) in short-term assets. The sum of its short-term liabilities ($811.43 million) and long-term liabilities ($924.93 million) is higher, at $1.73 billion — but to be clear, having short-term assets valued higher than both classes of liabilities is quite uncommon. This is an extremely healthy balance sheet we’re looking at.

There’s also a history of outperformance. Earnings have grown at an average pace of 20.69% per year in the past five years — compared to the industry’s 1.05%  Meanwhile, revenues have increased by an average of 8.05% on an annual basis in the same timeframe — during which the conglomerate industry marked an average reduction in revenue, to the tune of -0.81%.

If VMI has piqued your interest, you ought to mark April 22 on your calendar, as the company will hold its Q1 2025 earnings call pre-market. 

Conclusion

A strong balance sheet isn’t everything, but it counts for a lot in a volatile market. For more stocks like these, check out the screener I used to source the above picks: WallStreetZen’s Strong Financial Health screener.

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