Almost any way you look at it, the long stock market run looks like it is starting to hit a wall. The commodity market from oil to gold has been hammered, the dollar has strengthened substantially, China’s stock market has imploded, and the S&P 500 may be on track to post the first negative earnings-per-share growth since 2009.
In a new report from Merrill Lynch’s top notch equity strategist Savita Subramanian, she and her team look for stocks to buy now that are consistent and predictable when it comes to earnings and more.
Subramanian points out that with all the macro and economic turmoil, clients are more and more asking for stock recommendations for companies that deliver on a consistent and predictable basis.
Within that very stringent set of qualifications the Merrill Lynch team came up with 16 stocks that met the criteria. We then screened them for the stocks that are ranked highest and are rated Buy at Merrill Lynch.
This stock has had an outstanding summer so far up a sizzling 6.6%. Nike Inc. (NYSE: NKE) is a world wide athletic giant makes the list as top consumer discretionary name, and posted very strong fiscal fourth quarter earnings when they reported in June.
The company also has outstanding potential upside from a turnaround in its China business, improvements in gross margins and continued innovation-driven market share gains in both basketball and running footwear. With one of the most recognizable brands in the world, long-term investors may do very well adding shares here despite the big move up in the stock this year.
Nike is benefitting from consumer preferences for “athleisure”. With the company’s extensive product line and recognizable worldwide branding, the stock continues to roll year-after-year. Nike Investors are paid a 1% dividend from the sporting apparel giant.
The Merrill Lynch price target for the stock is $120, and the consensus price target is posted at $117.30. Nike closed at $113.47 yesterday.
UnitedHealth Group, Incorporated
This is a top stock to buy in the rapidly consolidating managed health sector. UnitedHealth Group, Incorporated (NYSE: UNH) offers the full spectrum of health benefit programs for individuals, employers and Medicare and Medicaid beneficiaries, and contracts directly with more than 800,000 physicians and care professionals, and 6,000 hospitals and other care facilities.
The company offers a broad spectrum of products and services through two distinct platforms: UnitedHealthcare, which provides health care coverage and benefits services; and Optum, which provides information and technology-enabled health services.