Thematic investing is one of those areas that sound great, because the aim is to capitalize on the themes that will prevail for the years or decade ahead. It also sounds a lot easier than it turns out to be.
Bank of America Merrill Lynch has identified its top quarterly primer picks in several aspects for “A Transforming World,” and the millennials (or Generation Next) is one of those themes.
The Merrill Lynch report sees millennials being the number one global and U.S. demographic, and it sees them being the number one group in income and wealth by 2025. This creative disruption of the age group is changing sectors like autos, dining, finance, media, tech and travel.
Here are the top thematic picks from Merrill Lynch to profit off of the trends driving millennials.
Amazon.com Inc. (NASDAQ: AMZN) was the top pick for services and shopping use for millennials. The attraction here is Amazon’s leadership in e-commerce, the potential for delivery drones and, of course, for Amazon Web Services. Amazon is rated as Buy at Merrill Lynch with a price objective of $750.00.
Shares of Amazon traded at $577.49 on Friday. The stock has a consensus analyst target of $736.27 and a 52-week trading range of $365.65 to $696.44.
Comcast Corp. (NASDAQ: CMCSA) was picked as the number one U.S. cable services provider. This almost seems odd when you consider that the cord-cutting theme is being led by millennials. Still, as has been said often, that fat data pipe has to come from somewhere, and at the end of the day they may still opt for a skinnier bundle and supplement their media with over-the-top services.
Merrill Lynch has a Buy rating and an $84.00 price objective. Comcast shares recently traded at $59.92, with a consensus price target of $69.44 and a 52-week range of $50.00 to $64.99.
Facebook Inc. (NASDAQ: FB) was selected as the top social network that is taking over the world. While not all younger people are Facebook addicts, the one undeniable truth is that Facebook is succeeding in mobile content expansion while others are still suffering from it. Facebook was rated as Buy at Merrill Lynch, which has a $140 price objective.
Facebook shares traded at $109.58, with a consensus analyst target of $133.49 and a 52-week range of $72.00 to $117.59.