Bank of America says buy these 17 under-owned stocks that are set to benefit from a faster economic recovery and improved COVID response

  • Biden’s COVID containment and economic relief plans should improve GDP, Bank of America says.
  • The firm highlights 17 stocks that make for strong buys as the economy recovers.
  • These companies are under-owned by active fund managers and have lower labor costs. 
  • Visit the Business section of Insider for more stories.

With no time to lose, Joe Biden hit the ground running as he signed 15 executive orders within his first 24 hours as the 46th president of the United States. 

“There is no time to waste when it comes to tackling the crises we face. That’s why today, I am heading to the Oval Office to get right to work delivering bold action and immediate relief for American families,” he tweeted on January 20. 

Having inherited the most dangerous pandemic in 100 years and a struggling economy that left millions unemployed, he is pushing for a $1.9 trillion stimulus package as well as a better-coordinated COVID response, Bank of America wrote in a recent note. 

These containment and spending plans should improve GDP, given the massive amount of fiscal spending that could soon be unleashed through stimulus checks — even more so now as Democrats are preparing to go solo in passing the bill without Republican votes. 

These earnest approaches towards COVID-19 containment and financial relief for Americans will likely guide the economy to a faster recovery, according to the analysts led by Savita Subramanian, the bank’s head of equity and quantitative strategy. 

With this in mind, Bank of America screened for S&P 500 stocks with a high sensitivity, or beta, to rising GDP. They further sought out those that are under-owned by active fund managers in that relative to the S&P 500, they make up less than 1x of portfolio holdings.

Then, they filtered for non-labor-intensive names that would better withstand minimum-wage hikes by finding companies in the top half of sales per employee. And finally, they only featured firms that are buy-rated by BofA analysts.

Here are the 17 names Bank of America recommends buying as the economy gets back on track and virus cases die down. They are listed in no particular order. 

1. AES

Ticker: AES

Sector: Utilities 

GDP Beta: 0.88

Sales per employee: $1.3 million

Source: Bank of America 

2. Mosaic

Ticker: MOS

Sector: Chemicals

GDP Beta: 0.71

Sales per employee: $0.7 million

Source: Bank of America

3. SBA Communications

Ticker: SBAC

Sector: Real Estate

GDP Beta: 0.67

Sales per employee: $1.4 million

Source: Bank of America

4. Deere

Ticker: DE

Sector: Industrials 

GDP Beta: 0.55

Sales per employee: $0.5 million

Source: Bank of America

5. CF Industries Holdings

Ticker: CF

Sector: Materials

GDP Beta: 0.55

Sales per employee: $1.5 million

Source: Bank of America 

6. Crown Castle International

Ticker: CCI

Sector: Real Estate

GDP Beta: 0.49

Sales per employee: $1.1 million

Source: Bank of America

7. Charles Schwab

Ticker: SCHW

Sector: Financials

GDP Beta: 0.46

Sales per employee: $0.6 million

Source: Bank of America

8. Hartford Financial Services Group

Ticker: HIG

Sector: Financials

GDP Beta: 0.45

Sales per employee: $1.1 million

Source: Bank of America

9. Incyte

Ticker: INCY

Sector: Health Care

GDP Beta: 0.38

Sales per employee: $1.5 million

Source: Bank of America

10. Duke Realty

Ticker: DRE

Sector: Real Estate

GDP Beta: 0.34

Sales per employee: $2.4 million

Source: Bank of America

11. SVB Financial Group

Ticker: SIVB

Sector: Financials

GDP Beta: 0.32

Sales per employee: $0.9 million

Source: Bank of America

12. Boston Properties

Ticker: BXP

Sector: Real Estate

GDP Beta: 0.31

Sales per employee: $3.9 million

Source: Bank of America

13. Ford

Ticker: F

Sector: Consumer Discretionary 

GDP Beta: 0.27

Sales per employee: $0.8 million

Source: Bank of America

14. Alexandria Real Estate

Ticker: ARE

Sector: Real Estate

GDP Beta: 0.25

Sales per employee: $3.5 million

Source: Bank of America

15. Public Storage

Ticker: PSA

Sector: Real Estate

GDP Beta: 0.24

Sales per employee: $0.5 million

Source: Bank of America

16. Prologis

Ticker: PLD

Sector: Real Estate

GDP Beta: 0.23

Sales per employee: $1.9 million

Source: Bank of America

17. United Rentals

Ticker: URI

Sector: Industrials

GDP Beta: 0.23

Sales per employee: $0.5 million

Source: Bank of America

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