Merrill Lynch Makes 3 Key Changes to US 1 List in Oil and REITs

Many firms have their own version of a “focus list” of top Buy-rated stocks for their clients. The Merrill Lynch US 1 List is effectively the same thing as the Conviction Buy List from Goldman Sachs. Now we have seen three changes made to the US 1 List.

Merrill Lynch sees its US 1 list as representing a collection of its best investment ideas drawn from its universe of stocks with Buy ratings. It includes U.S.-listed companies and American depositary shares that are covered by the Bank of America Merrill Lynch team of fundamental equity research analysts, and its picks are managed with a goal of providing superior investment performance over the long term. Here are Tuesday’s three changes to the Merrill Lynch US 1 List.

Simon Property Group Inc. (NYSE: SPG) was added to the US 1 list, while General Growth Properties (NYSE: GGP) was removed. Merrill Lynch said that the firm is making an adjustment based on the overall composition of the list. Occidental Petroleum Corp. (NYSE: OXY) was also removed from the US 1 list. Despite Occidental and General Growth Properties being ejected from the US 1 list, both stocks were maintained as Buy at the firm.

ALSO READ: 7 Fresh Analyst Stock Picks With Massive Upside

A quick look was made to see the price objective from the firm’s fundamental analysts. Simon Property targets 9% average returns and is targeting premium outlet store locations for high-quality and high-traffic properties. Simon’s price objective was $223.00, versus a pre-call closing price of $191.81. On the General Growth removal, Merrill Lynch still has a $33.00 price objective (versus a $27.08 prior close) and the firm said:

We maintain our Buy rating on General Growth Properties, which we believe still retains an above-average growth profile. General Growth is expecting a stronger second half of 2015, driven in part by redevelopments opening in the second half. Given uncertainty regarding the economy, we believe there will be a flight to safety and prefer Simon’s exposure to premium outlets.

Simon Property has a yield of 3.3%. At $192.70, it has a 52-week trading range of $164.13 to $206.31 and a consensus analyst price target of $217.68.

General Growth has a yield of 2.7%, and its current price of $26.91 is against a 52-week range of $23.38 to $31.70. The real estate investment trust (REIT) also has a consensus analyst price target of about $32.50.

While few specifics were put out fresh on Occidental, Merrill Lynch said that the move is following the expiration of its 12-month term on the list. A prior report from Merrill Lynch suggested that Occidental was a bias pick with a $95.00 price objective. That is versus a prior $70/65 close and a 52-week range of $63.60 to $92.62. Occidental yields more than 4%.

ALSO READ: Huge Carl Icahn Energy Purchases Highlight Recent Insider Buying

Sponsored: Tips for Investing

A financial advisor can help you understand the advantages and disadvantages of investment properties. Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.

Investing in real estate can diversify your portfolio. But expanding your horizons may add additional costs. If you’re an investor looking to minimize expenses, consider checking out online brokerages. They often offer low investment fees, helping you maximize your profit.