For those traders looking to make a quick buck on a fast moving stock, a high beta is a very helpful thing. Whether you're playing the long or the short side, beta means your stock is moving at a greater rate than the overall market. For instance, a stock with a beta of two moves up (or down) at twice the rate of the broad market. So if the S&P 500 is up 1.2%, your two beta stock will likely be up 2.4%. (To learn more about beta, see Beta: Gauging Price Fluctuations.)

IN PICTURES: 8 Tips For Starting Your Own Business

Day Trader or Value Investor?
Without this added volatility, it's harder for day and swing traders to make money in the short term.

But what in the world are high-yielding stocks doing sporting outsized "betas"? Moreover, high yielders with low P/Es trading for less than book value. Is it possible? It's hard to figure whether the following three issues fall into the domain of the value investor or the day trader.

Trading at Half Book Value
Kohlberg Capital Corp (NASDAQ:KCAP) is a closed-end investment company that takes both equity and debt positions in privately held, middle market companies. KCAP stock has a P/E of 4.19 and offers investors an annual dividend of 13.44%. In the last six months the stock is up by more than 19%.

That's a far better return than the Financial Select Sector ETF (NYSE:XLF), a proxy for the broad financial sector, which is down over 4% for the same period.

KCAP shares trade at just half their breakup value, with a P/B of 0.53 and has a beta of 2.23.

Freedom to Profit
One Liberty Properties, Inc. (NYSE:OLP) is up better than 50% in 2010. The stock yields 8.5% and trades with a P/E of 12.37. Price to book for the company is 0.87.

One Liberty is a REIT that focuses on furniture, office supply, and health and fitness establishments. It trades with a beta of 2.3. One Liberty has outpaced the REIT niche, as represented by the Vanguard REIT ETF (NYSE:VNQ) which is up under 20% in the new year.

Resource Capital Corp. (NYSE:RSO) is another financial with a big 2.36 beta and a dividend yield of 17.2%. The P/E on RSO shares is a mere 4.7. The company's stock is up over 18%. Resource Capital is a New York-based financial that is set up as a REIT and deals mostly with commercial real estate. (For more on commercial real estate, see Find Fortune In Commercial Real Estate.)

The Wrap
Call them big-beta traders or long-term value holds, these three stocks may have a place in nearly every investor's portfolio.

Use the Investopedia Stock Simulator to trade the stocks mentioned in this stock analysis, risk free!

Related Articles
  1. Investing

    Time to Bring Active Back into a Portfolio?

    While stocks have rallied since the economic recovery in 2009, many active portfolio managers have struggled to deliver investor returns in excess.
  2. Chart Advisor

    Now Could Be The Time To Buy IPOs

    There has been lots of hype around the IPO market lately. We'll take a look at whether now is the time to buy.
  3. Stock Analysis

    Allstate: How Being Boring Earns it Billions (ALL)

    A summary of what Allstate Insurance sells and whom it sells it to including recent mergers and acquisitions that have helped boost its bottom line.
  4. Chart Advisor

    Copper Continues Its Descent

    Copper prices have been under pressure lately and based on these charts it doesn't seem that it will reverse any time soon.
  5. Options & Futures

    Cyclical Versus Non-Cyclical Stocks

    Investing during an economic downturn simply means changing your focus. Discover the benefits of defensive stocks.
  6. Mutual Funds & ETFs

    Buying Vanguard Mutual Funds Vs. ETFs

    Learn about the differences between Vanguard's mutual fund and ETF products, and discover which may be more appropriate for investors.
  7. Mutual Funds & ETFs

    ETFs Vs. Mutual Funds: Choosing For Your Retirement

    Learn about the difference between using mutual funds versus ETFs for retirement, including which investment strategies and goals are best served by each.
  8. Mutual Funds & ETFs

    How to Reinvest Dividends from ETFs

    Learn about reinvesting ETF dividends, including the benefits and drawbacks of dividend reinvestment plans (DRIPs) and manual reinvestment.
  9. Investing Basics

    How to Deduct Your Stock Losses

    Held onto a stock for too long? Selling at a loss is never ideal, but it is possible to minimize the damage. Here's how.
  10. Mutual Funds & ETFs

    Best 3 Vanguard Funds that Track the Top 500 Companies

    Discover the three Vanguard funds tracking the S&P 500 Index, and learn about the characteristics and historical statistics of these funds.
  1. Should mutual funds be subject to more regulation?

    Mutual funds, when compared to other types of pooled investments such as hedge funds, have very strict regulations. In fact, ... Read Full Answer >>
  2. Do ETFs pay capital gains?

    Exchange-traded funds (ETFs) can generate capital gains that are transferred to shareholders, typically once a year, triggering ... Read Full Answer >>
  3. How do real estate hedge funds work?

    A hedge fund is a type of investment vehicle and business structure that aggregates capital from multiple investors and invests ... Read Full Answer >>
  4. Are Vanguard ETFs commission-free?

    While some Vanguard exchange-traded funds (ETFs) are available commission-free from third-party brokers, a large portion ... Read Full Answer >>
  5. Do Vanguard ETFs require a minimum investment?

    Vanguard completely waives any U.S. dollar minimum amounts to buy its exchange-traded funds (ETFs), and the minimum ETF investment ... Read Full Answer >>
  6. Can mutual fund expense ratios be negative?

    Mutual fund expense ratios cannot be negative. An expense ratio is the sum total of all fees charged by an asset management ... Read Full Answer >>

You May Also Like

Trading Center