Stocks are within a few points of their all-time highs. However there are a few signs that the market's bull run could soon hit a few bumps.
In his latest research note, JP Morgan's Tom Lee says he is remaining cautious on stocks due to higher taxes, rising gas prices and the sequestration budget cuts.
Lee has put together 15 stocks that could leave investors insulated to any oncoming volatility. Here's what makes them unique.
"Interestingly, in the last 11 5%- pullbacks since 2009, this group of 15 stocks outperformed the S&P 500 8 of the 11," wrote Lee. "In other words, these names provide exposure to a portfolio of US stocks that could be seen as relatively safe, even in the anticipation of a pullback."
The screening criteria: less than 15 months of both a) negative monthly absolute performance, and b) relative monthly underperformance (vs SPX) of more than 150bps. And, the largest monthly relative underperformance (since 2009) is no greater than 8 percent.
Dentsply International
Ticker: XRAY
Implied upside (downside): NA
Largest monthly underperformance:
-6.5 percent
Industry: Health care supplies
Comment: Dentsply just raised its dividend by 13.6 percent.
Source: JPM
Loews Corp.
Ticker: L
Implied upside (downside): NA
Largest monthly underperformance:
-7.4 percent
Industry: Insurance
Comment: Loews stock just hit a 52-week high.
Source: JPM
3M
Ticker: MMM
Implied upside (downside): (8 percent)
Largest monthly underperformance:
-6.6 percent
Industry: Finished products conglomerate
Comment: 3M shares are up 17 percent since December.
Source: JPM
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