With the market getting staggered a touch this week, and the beginning of the second half of the year and a new earnings season here, many Wall Street firms that we cover are presenting their ideas for the balance of 2014. While many differ on tactics, strategy and sector picks, almost all agree we will end the year higher. Some have targets as high as 2,100 on the S&P 500.
The analysts at Merrill Lynch have run their growth stock screens and selected 10 top names that have very high forward five-year earnings per share growth expectations. While they may have a higher level of volatility as opposed to the Merrill Lynch value picks we recently highlighted, they also bring a higher risk/reward quotient.
The Merrill Lynch growth picks list is crowded with solid names that have outstanding earnings projections for the coming years. These are intended for growth-oriented and more risk-tolerant portfolios. Long-term investors though, can feel comfortable adding them to a well-diversified account.
Here are the 10 Merrill Lynch growth stocks to buy for the rest of 2014. All of them are rated Buy at the firm.
Amazon.com Inc. (NASDAQ: AMZN) recently announced its entry into the smartphone arena, and it is a top stock to buy at Merrill Lynch, especially on an oversold basis now. The Internet retail giant is down a very big 18% year-to-date. Many Wall Street analysts view Amazon as the innovation leader and a top stock to own for 2014 and beyond. In addition to its online retailing muscle, it has a gigantic cloud storage business that continues to dominate rivals.
Amazon will add even more revenue to the top line with the recent increase in its Amazon Prime memberships. The Merrill Lynch price target for the stock is $420. The Thomson/First Call consensus target is at $414.32. Amazon closed on Wednesday at $329.97 a share.
AutoNation Inc. (NYSE: AN) is one of the leading auto dealership conglomerates in the United States. The call at Merrill Lynch is for strong second-quarter new car sales and growing parts and service revenues (boosted by recalls). The firm also sees buybacks or acquisitions driving above-consensus earnings. The Merrill Lynch price target is $75, and the consensus is much lower at $52.29. AutoNation closed Wednesday at $61.23.