The S&P 500 showed impressive growth in the first half of 2023, with a nearly 16% increase during the initial two quarters. Despite concerns about rising interest rates, the possibility of a recession, and troubles in the regional banking sector, the index entered into a bull market in June by surging over 20% from its low point in October 2022.
As we look ahead to the latter half of 2023, there’s an increasing likelihood that the Federal Reserve will be able to guide the U.S. economy towards a gentle landing. However, it’s worth noting that the New York Fed’s recession prediction model still suggests a 70.8% chance of a U.S. recession within the upcoming year.
Given the remarkable progress in stock value and the looming economic challenges, you might be concerned that it’s too late to invest in stocks. However, it’s important to discard this notion. The stock market has a consistent history of long-term growth. While selecting the right stocks at the opportune moment can be demanding, there remain numerous excellent investment opportunities for patient shareholders.
Amidst this turbulent and uncertain market landscape, Bank of America has recently assembled a list of their top-recommended stocks to consider buying at this time. We present these selections below:
American Homes 4Rent (AMH): PE Ratio 75.8
American Homes 4Rent is a company that’s really good at taking care of and renting out nice houses. They mainly do this in sunny areas of the United States.
A smart person who studies money and businesses, called Joshua Dennerlein, says that American Homes 4Rent has special chances that other similar companies don’t have. This is because they have their own way of building and managing houses.
Looking into the future from the middle of 2023 onwards, Dennerlein thinks there are some good things that could help American Homes 4Rent’s share price go up.
He explains, “There aren’t many houses available to rent, and not many people are selling their houses. Also, more and more people want to rent houses instead of buying them.”
Soon, Dennerlein thinks that the company will tell everyone how well they’re doing in finding people to rent their houses. This news is expected to come out in late July.
A big bank called Bank of America thinks it’s a good idea to buy shares of American Homes 4Rent, and they think the shares could be worth around $43 each in the future.
Bath & Body Works (BBWI): PE Ratio 10.4
Bath & Body Works is a really popular store where they sell lovely candles and things that help you take care of yourself.
Lorraine Hutchinson, who’s really smart about money and businesses, says that Bath & Body Works has been getting better and better, and the price of their stock is good compared to other stores that sell things in real shops. This is important because a lot of shops are finding it hard to do well when competing with big online stores like Amazon.
This year, in 2023, Bath & Body Works has become more popular and is doing well in the three main things they sell: things that make you smell nice, things for your body, and soap.
Hutchinson says, “We think there are many things that will help Bath & Body Works keep growing this year. They will keep making new things that smell good and people like to buy, and they’ll start selling more stuff like hair products, skin products, and even things for laundry. Also, lots of people are joining their special club to buy things, and that’s helping them too.”
Bank of America thinks it’s a good idea to buy shares of Bath & Body Works, and they think the shares could be worth around $50 each in the future.
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Datadog (DDOG): PE Ratio 70.1
Datadog is a company that makes special tools for computers that run on the cloud. These tools help keep an eye on how well these cloud programs are working and make sure they’re safe.
Koji Ikeda, who’s really good with money and businesses, thinks that Datadog is doing well because many people want their tools. He also says that Datadog’s plans for money are not too high, so it’s easier for them to do well in the second part of the year.
He also mentions that in the future, more and more computers will use smart technology like AI. This means these computers will make a lot of information that companies will need to understand and keep safe.
“We want to hear in the next talk about how many people still want Datadog’s tools and how the clever AI computers will use them. This could show us that Datadog will make even more money in 2024,” Ikeda explains.
Bank of America thinks it’s a good plan to buy Datadog’s shares, and they think the shares could be worth around $110 each in the future.
Dexcom (DXCM): PE Ratio 76.4
Dexcom is a company that makes special devices to help people with diabetes. These devices help keep track of their blood sugar levels, which is really important for staying healthy.
A big organization that helps with health coverage recently decided to help more people with diabetes. They now want to support even those who have a certain kind of diabetes and use a specific type of insulin. A smart person who knows about money and businesses, Travis Steed, thinks this is great for Dexcom. He says that not many people with this type of diabetes are using the special devices yet, so there’s a big chance for Dexcom to help more people and grow in the long run.
Steed adds, “We asked 25 doctors, and many of them said that more people are getting interested in using these devices since the health coverage changed.”
On top of this, Dexcom is also planning to make a device for people with a different kind of diabetes. This is a big step that could help even more people and make Dexcom grow even more. The company is also trying to help people in other countries.
Bank of America thinks it’s smart to buy shares of Dexcom because they believe the company will do well. They think the shares could be worth around $140 each in the future.
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Fortive (FTV): PE Ratio 21.1
Fortive is a company that does different things in three areas: smart solutions, precise technologies, and advanced healthcare.
One part of Fortive, which helps with healthcare, makes up about 22% of all the money the company earns. A clever person who knows a lot about money and businesses, Andrew Obin, thinks that the healthcare part will do well in the next months.
“We think that the healthcare part will make more money because they’ve made changes to spend less money, the number of medical procedures in China is getting back to normal, they’re trying a new way to sell things in North America, and they’re getting a bit more money when they exchange different currencies,” Obin explains.
Also, Obin believes that Fortive will make a lot of money from computer programs and that they’ll do well in the next three months. He also mentions that Fortive has lots of orders for their products, so they know they will have money coming in.
Bank of America thinks it’s a smart idea to buy shares of Fortive because they think the company will do well. They believe the shares could be worth around $87 each in the future.
Lamb Weston (LW): PE Ratio 17.9
Lamb Weston is a big company that makes and sells frozen French fries and other potato products.
A clever money expert named Peter Galbo thinks Lamb Weston will do even better than people expect in July and will make more money this year. He also believes that lots of people are buying their products in the US and that as China’s economy gets better, more people around the world will want to buy from them.
“Many people are still going to restaurants, which is where Lamb Weston sells most of its food. They also made their prices a bit higher in some places, and that’s going well. People are saying good things about the potatoes they’ll have for the summer of 2023,” Galbo says.
Because Lamb Weston is planning to make even more products, Galbo thinks they could make $6 for every share of their company.
Bank of America thinks it’s a great idea to buy shares of Lamb Weston because they believe the company will do really well. They think the shares could be worth around $130 each in the future.
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Lear (LEA): PE Ratio 9.3
Lear is a big company that makes seats and electrical systems for cars all around the world.
A really smart money expert named John Murphy thinks Lear is a fantastic choice if you want to invest in car companies for a long time. He says Lear has a history of growing a lot, making a good amount of money, and having extra money to use.
“Also, Lear is in a good spot because they’re connected to big changes happening in the car world, like making cars run on electricity and connecting them to the internet. They’re also making a lot of cars in the U.S. and Europe, which is picking up faster than we thought,” Murphy explains.
He adds that Lear is going to share more money with the people who invest in their company. Murphy believes that as Lear talks with its customers and sells more of its products, they’ll be able to make even more money.
Bank of America thinks it’s a great idea to buy shares of Lear because they believe the company will do really well. They think the shares could be worth around $170 each in the future.
Netflix (NFLX): PE Ratio 27.9
Netflix is a big company that lets people all around the world pay a subscription to watch TV shows and movies online. They have more than 232 million people who pay to use their service.
A really smart money expert named Jessica Reif Ehrlich thinks Netflix is very special because lots of people know and like them. She also believes Netflix will do even better in the second half of 2023.
First, Netflix is making sure that only the right people use their accounts. Then, they’re going to start a new way of paying with ads, which could help even more people use Netflix. Lastly, Ehrlich says Netflix will start making more money and getting more people to use their service instead of traditional TV.
“If we guess that a bit more than half of the people who share passwords in the US start using Netflix in different ways, they could make around $2 billion more every year,” Ehrlich explains.
Bank of America thinks it’s a great idea to buy shares of Netflix because they believe the company will do really well. They think the shares could be worth around $490 each in the future.
Walt Disney (DIS): PE Ratio 17.5
Walt Disney is a big company that makes movies, TV shows, runs theme parks, and sells products all over the world.
Even though Disney’s stock hasn’t been doing as well as some other companies, a clever money expert named Ehrlich thinks there are good reasons it might do better in the next few months.
Disney has made its streaming services cost a bit more, and Ehrlich believes more people will want to show their ads on Disney+. She also thinks Disney is careful about how they spend money and that many people will want to visit their theme parks in the summer, which could help their stock price go up.
“Also, in September, Disney will talk about its future plans, goals, and how they’ll make their movies and shows better,” Ehrlich explains.
Bank of America thinks it’s a great idea to buy shares of Disney because they believe the company will do really well. They think the shares could be worth around £135 each in the future.
Wells Fargo (WFC): PE Ratio 9.3
Wells Fargo is a big American bank with lots of money, more than $1.8 trillion!
In the first half of 2023, bank stocks had ups and downs because of some problems with other banks and changes in bond prices. But, Wells Fargo and many other big American banks passed a special test by the government that checks if they can handle tough situations. This made investors feel better about the banking industry.
A smart money expert named Ebrahim Poonawala thinks Wells Fargo is a good choice because it’s priced well and could make investors happy.
“The bank did well in the government test, and they have extra money to use. This means they can give some of it to investors and still be ready for any changes in the rules,” Poonawala explains.
Bank of America thinks it’s a good idea to buy shares of Wells Fargo because they believe the bank will do well. They think the shares could be worth around £47 each in the future.
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Methodology
At the start of every three months, Bank of America creates a list of the top stocks they believe will do well during that time. They do this by studying the basic details of the companies, using their team of experts who understand the stock market.
For each stock on the list, the experts point out special things that are likely to happen before the quarter ends.
All the stocks on the list are checked by Bank of America experts, and usually, they stay on the list for the entire three months. The only reasons they might be taken off are if the experts stop following them or if their recommendations change.
Bank of America’s Top 10 U.S. Ideas list has both suggestions for stocks that might do well and ones that might not, but the list they share only includes the ones they think will do well.
Note:-Remember, the stocks mentioned above were picked by really experienced financial experts, but they might not be the right fit for your investments. Before you decide to buy any of these stocks, do a lot of research to make sure they match your financial goals and how much risk you’re comfortable with.
When you’re thinking about buying stocks,
it’s really important to do your homework and consider a few important things that can affect how well a company does. Here’s what you should pay attention to:
- Financial Health: Check out the company’s money details, like how much they make, their profits, how much they owe, and how much they own. This helps you figure out if the company is in good financial shape and if buying their stock is a smart choice.
- Industry Trends: Understand what’s happening in the industry the company is a part of. Read reports, news, and predictions from experts to get an idea of where the industry is headed.
- Management: The people who run the company can make a big difference. Look at their history and how they’ve made decisions before. Their leadership and plans are important.
- Competitive Edge: Some companies have special things that make them better than others, like a strong brand or unique inventions. These can help the company do well in the market and make their stock valuable.
- Value: Figure out if the stock’s price is reasonable compared to other similar companies. You can use numbers like the price-to-earnings ratio and others to help with this.
- Dividends: It’s good to pick stocks that give you back some of the money they make. This is called a dividend. Over time, these payments can add up and boost your profits.
- Risks: All investments have risks, and stocks are no different. Look at things like how much the company owes, how steady the industry is, and even global issues that could affect how well the company does.
Remember, looking at all these things before buying stocks can help you make smarter decisions and hopefully earn more money in the long run.
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FAQ
How do I know which stocks to buy?
Choosing stocks requires research. Look at a company’s financial health, its industry trends, management team, and competitive advantages. Consulting experts and staying informed about the market can also help.
What is a bull market and a bear market?
A bull market is when the stock market is doing well and prices are rising. A bear market is when the market is struggling, and prices are falling.
What is a stock index?
A stock index is a collection of stocks that represent a particular market or industry. Common examples include the S&P 500 and the FTSE 100.
How do I manage risk when investing in stocks?
Diversification is key. Instead of putting all your money into one stock, spread it across multiple stocks and even other types of investments. This can help reduce the impact if one investment performs poorly.
How often should I check my stocks?
It’s good to stay informed, but checking too frequently can lead to emotional decision-making. Many investors review their portfolios every few months or when there’s significant news.
Is investing in stocks a guaranteed way to make money?
No, there are no guarantees in the stock market. While historically stocks have offered good returns over the long term, there’s always the risk that individual stocks can lose value.
Remember, before making any investment decisions, it’s wise to consult with a financial advisor and educate yourself about the market.
Sources
Article:- Respective companies of the name mentioned, Forbes, Google news, Bank of America, MSN, Bing
Image:- PR newswire, Reatil4growth, The Motley fool, Dexcom, Healthcare technology report, Lamb welson, Yahoo Finance,