- JPMorgan says value stocks are poised to outperform their growth counterparts in 2021.
- In a recent note, they laid their top 48 value stock picks for the new year.
- Visit Business Insider's homepage for more stories.
Over the past 13 years, there haven't been many high-conviction opportunities to step into value stocks.
But that time has come, according to JPMorgan.
Value stocks may outperform their growth counterparts as economic activity looks set to recover in 2021 amid COVID-19 vaccinations.
In a December 7 note, JPMorgan laid out their case for cheap stocks, and said they would be the driving force behind a rise in the S&P 500 next year.
"The backdrop of globally synchronized expansion, legislative gridlock and positive vaccine news should be a strong catalyst for Value stocks, which have been beaten down due to the COVID crisis. By contrast, Momentum/Growth stocks should lag," wrote the bank's Nicholas Rosato, Claudia Hueston, and Scott Hansen.
They also pointed to technical analysis that led them to predict that the S&P 500 Value Index will reach all-time highs in early 2021 and continue to rise thereafter.
Their analysis is laid out in the charts below.
"Throughout the last economic cycle, Value was only able to outpace Growth during the periods when the Global manufacturing PMI data advanced," the researchers said.
"The multi-month base pattern now present on the S&P 500 Value/Growth Index ratio chart suggests to us that the market is gearing up for another one of those periods," they added, referencing Figure 13.
At the same time, not all value stocks are equal, and some present better opportunities than others. Morgan Stanley, for one, warned in early December that investors may have missed the economic recovery trade for some stocks, and said that individual stock picking would be important going forward.
That said, below are JPMorgan's top 48 value stock picks for the new year.
JPMorgan's top 48 value stock picks for 2021
AerCap Holdings N.V. (AER)
Alphabet Inc. (GOOGL)
Altice USA (ATUS)
Bank of America (BAC)
Baxter Intl (BAX)
Bloomin' Brands (BLMN)
Broadcom Inc (AVGO)
Broadstone Net Lease (BNL)
Brookfield Asset Management (BAM)
CACI International (CACI)
Canadian Natural Resources (CNQ)
Caterpillar Inc. (CAT)
Cheniere Energy, Inc. (LNG)
Citizens Financial Group (CFG)
Constellation Brands Dana Inc (STZ)
Delta Air Lines, Inc. (DAL)
Discover Financial (DFS)
Entergy Corp. (ETR)
Enterprise Products Partners L.P. (EPD)
Extended Stay America (STAY)
FedEx Corporation (FDX)
General Motors (GM)
Genuine Parts Company (GPC)
International Flavors & Fragrances (IFF)
KLA Corporation (KLAC)
L Brands, Inc (LB)
Lam Research (LRCX)
Magellan Midstream Partners, L.P. (MMP)
MetLife, Inc. (MET)
PDC Energy (PDCE)
Phillips 66 (PSX)
PulteGroup Inc. (PHM)
Spirit AeroSystems (SPR)
Summit Materials (SUM)
Tapestry Inc (TPR)
TechnipFMC PLC (FTI)
The Wendy's Company (WEN)
Wyndham Destinations (WYND)
Wyndham Hotels & Resorts (WH)
Get the latest JPM stock price here.
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