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Reuters / Lucas Jackson
- Merrill Lynch, of the Bank of America, on Monday released a report pointing out that 10 "defensive" stocks are expected to outperform markets during a downturn.
- A set of proprietary indicators denotes a continued weakness in economic growth, according to badyst Savita Subramanian.
- BAML recommends, among other things, actions in the automotive and health sectors.
- Visit the Markets Insider homepage for more stories.
Merrill Lynch, of the Bank of America, has released a recent report in which he cites a few economic indicators that fears an economic slowdown. The bank's badysts recommend 10 stocks to investors looking to isolate their portfolios from a slowing economy.
"High quality" and "defensive" stocks outperform their peers in slower growing environments, BAML badyst Savita Subramanian said in a report released on Monday. She added that stocks are "less tied to cyclical pressures" and are under-controlled by active funds.
This contrasts optimistically with the so-called overcrowded companies such as Visa and Amazon, whose strong ownership could intensify the market decline if everyone headed for simultaneous releases.
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Many of the companies mentioned are related to the automotive sector, ranging from Ferrari to parts retailer O & # 39; Reilly Automotive. Subramanian also includes Broadcom and Comcast, claiming that the use of data, cloud computing and the advent of 5G would keep the company's revenues in a potential recession.
According to the bank, listed shares have an average implied hike of 28%, and eight of the 10 companies have at least one "B +" S & P 500 common stock.
Here are the 10 companies highlighted in the report, ranked in ascending order of implicit increase from current levels. All data comes from Bank of America Merrill Lynch, and stock prices reflect Friday's close.
10. Broadcom
Insider Markets
Teleprinter: AVGO
Industry: Semiconductors and semiconductor equipment
Annual yield: 18.2%
Price of the action: $ 300.90
BAML Price Target: $ 345
Implicit advantages: 14.6%
9. Northrop Grumman
Insider Markets
Teleprinter: CNP
Industry: Aerospace and defense
Annual yield: 45.2%
Price of the action: $ 352.50
BAML Price Target: $ 405
Implicit advantages: 14.9%
8. Cerner
Insider Markets
Teleprinter: CERN
Industry: Health Technology
Annual yield: 40.2%
Price of the action: $ 73.10
BAML Price Target: $ 84
Implicit advantages: 14.9%
7. TJX Companies
Insider Markets
Teleprinter: TJX
Industry: Specialized distribution
Annual yield: 24%
Price of the action: $ 55.80
BAML Price Target: $ 65
Implicit advantages: 16.6%
6. O & # 39; Reilly Automotive
Insider Markets
Teleprinter: ORLY
Industry: Specialized distribution
Annual yield: 12.6%
Price of the action: $ 383.80
BAML Price Target: $ 450
Implicit advantages: 17.3%
5. Comcast
Insider Markets
Teleprinter: CMCSA
Industry: Media
Annual yield: 30.5%
Price of the action: $ 44.60
BAML Price Target: $ 58
Implicit advantages: 30%
4. Advanced auto parts
Insider Markets
Teleprinter: PAA
Industry: Specialized distribution
Annual yield: -3.6%
Price of the action: $ 152.60
BAML Price Target: $ 200
Implicit advantages: 31%
3. Ferrari
Insider Markets
Teleprinter: RACE
Industry: Cars
Annual yield: 65.7%
Price of the action: $ 165.90
BAML Price Target: $ 225
Implicit advantages: 35.7%
2. Centene
Insider Markets
Teleprinter: CNC
Industry: Suppliers and health services
Cumulative performance: -6.9%
Price of the action: $ 53.40
BAML Price Target: $ 75
Implicit advantages: 40.4%
1. Carmax
Insider Markets
Teleprinter: KMX
Industry: Specialized distribution
Annual yield: 46.4%
Price of the action: $ 91.20
BAML Price Target: $ 150
Implicit advantages: 64.5%
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