The BofA Merrill Lynch’s equity strategy team is out with a list of its 10 favourite stock picks for 2014.
“We provide a list of 10 S&P 500 stocks for 2014 — one from each of the 10 GICS sectors,” writes BofAML strategist Savita Subramanian in a note to clients. “These stocks align with our themes for the year-ahead 2014 and our quantitative work. This list is intended for the full year, meaning we do not provide updates intra-year.”
Below are the criteria the team used to select the picks:
- S&P 500 stocks which are Buy-rated by BofAML fundamental analysts
- Review of metrics for favourable valuation, quality, dividend growth or cash deployment, foreign exposure, GDP sensitivity, fund ownership vs. S&P 500 weighting, BofAML vs. consensus EPS expectations, and/or qualifications based on other themes in our Year Ahead outlook, such as the potential for self-help via operational turnarounds, divestitures, etc.
- After identifying the stocks consistent with the criteria above, we also considered the views of our fundamental analysts in choosing the stocks for the list.
And here are the picks: