Merrill Lynch Has 5 Stocks to Buy for a 2020 Jump in the ISM Index

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Jazz Pharmaceuticals

This top company is a favorite at Merrill Lynch and across Wall Street. Jazz Pharmaceuticals PLC (NASDAQ: JAZZ) is a biopharmaceutical company that identifies, develops and commercializes pharmaceutical products for various medical needs in the United States, Europe and elsewhere.

The company has a portfolio of products and product candidates with a focus in the areas of sleep and hematology/oncology. The company’s largest products are Xyrem for narcolepsy (excessive daytime sleepiness), followed by Erwinaze for acute lymphoblastic leukemia and Defitelio for veno-occlusive disorder (blockage of blood vessels in liver). Analysts feel the growth opportunity from Vyxeos (expected to become new standard of care in secondary acute myeloid leukemia) and JZP-110 have the greatest upside potential.

The $176 Merrill Lynch price target on Jazz Pharmaceuticals compares to the lower consensus figure of $170.88. The stock closed at $133.31 a share on Wednesday.

Masco

This lesser known stock has very solid growth potential. Masco Corp. (NYSE: MAS) is a leading building products company, manufacturing and selling paints, faucets, showerheads and other plumbing, cabinets, windows and other hardware products. Approximately 85% of 2018 sales were attributable to residential repair and remodel activity, with the remaining 15% from new residential construction.

The company’s portfolio of industry-leading brands includes Behr paint; Delta and Hansgrohe faucets, bath and shower fixtures; KraftMaid and Merillat cabinets; Milgard windows and doors; Kichler decorative and outdoor lighting; and HotSpring spas.

Masco offers investors a 1.16% dividend. Merrill Lynch has set a $54 price target for the shares. The analysts’ consensus target was last seen at $50.33, and the stock closed most recently at $46.67 per share.

Wheaton Precious Metals

This precious metals company makes good sense for more conservative accounts looking to have exposure to the sector. Wheaton Precious Metals Corp. (NYSE: WPM) is a Canadian precious metals streaming company with approximately 60% of its revenues from the sale of silver and 40% from gold.

Under the terms of long-term contracts, the company purchases silver and gold from a variety of mines, including Goldcorp’s Penasquito mine in Mexico, Vale’s Salobo mine in Brazil, the Lundin Mining Zinkgruvan mine in Sweden, and Glencore’s Antamina and Yauliyacu mines in Peru, then sells the silver and gold into the open market.

Shareholders receive a 1.35% dividend. The Merrill Lynch price target is $35. The consensus target is slightly lower at $34.50, and the stock was changing hands at $26.59 as Wednesday’s trading came to a close.

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While these are not manufacturing companies per se, remember that the analysts’ research shows significant potential for upside for these stocks when the ISM indicators rise. If they do in 2020, all these stocks could see their prices head higher.