Bank of America has named some stocks which the bank’s analysts say investors should buy as the economy gradually reopens.
The bank’s analysts and many investors are increasingly optimistic that the combination of aggressive government stimulus, vaccine rollouts and pent-up economic demand will drive stock prices even higher in the months and years ahead.
Therefore, Bank of America has released a list of top eight stocks to buy in the second quarter of 2021. These eight stocks are high-conviction investment ideas that have bullish catalysts coming sometime in the next three months. Here are the stocks:
Booking Holdings (ticker: BKNG)
Priceline’s parent company Booking Holdings is a leading online travel company. For investors betting on pent-up demand for leisure travel this summer, analyst Justin Post says Booking is a must-have investment in the second quarter.
The Walt Disney Co. (DIS)
The health crisis was bittersweet for Disney. Its theme park, cruise line and TV and movie production businesses took a huge hit in 2020. However, its critical Disney+ streaming service registered impressive subscriber growth during the crisis. Analyst Jessica Reif Ehrlich says Disney’s diversified business offers investors a unique reopening play that is both offensive and defensive.
Newmont Corp. (NEM)
More than $6 trillion in government stimulus since the beginning of 2020 has many investors concerned about inflation, which could be good news for gold prices. Analyst Michael Jalonen says Newmont is one of only a handful of senior gold miners that is currently increasing production while simultaneously managing to reduce costs. Jalonen says investors should get updates on the company’s capital return program and critical growth projects in April.
NXP Semiconductors (NXPI)
Analyst Vivek Arya says NXP Semiconductors has several bullish catalysts ahead in the second quarter. First, the company’s addition to the S&P 500 in late March will likely raise investor awareness just as NXP’s cyclical and secular growth is accelerating.
O’Reilly Automotive (ORLY)
Analyst Elizabeth Suzuki says auto parts retailers with exposure to professional auto service are underappreciated economic reopening investments. Suzuki says O’Reilly has an attractive mix of professional auto services and do-it-yourself sales and is well positioned to beat consensus earnings expectations in late April.
Parker Hannifin Corp. (PH)
Parker Hannifin supplies hydraulics and motion and fluid control systems to industrial and aerospace end markets. Analyst Andrew Obin says management has reduced the company’s leverage and improved its earnings, making Parker Hannifin a best-in-class industrial investment.
Travel and industrial oil demand tanked in 2020, but analyst Chase Mulvehill says pent-up economic reopening demand will be very bullish for oil services company Schlumberger. Mulvehill says the oil services industry is in the early stages of a cyclical upswing that could start to pick up steam this summer.
Stryker Corp. (SYK)
Stryker is a medical technology company that specializes in orthopedics and neurotechnology. In the longer term, analyst Bob Hopkins says an industry shift to more outpatient surgeries will be a tailwind for Stryker. He says Stryker will likely outperform its medtech peers in months ahead.