Investing

Goldman Sachs Out With Top Tactical Stocks to Buy for the Next 2 Quarters

Morgan Stanley

This is one of Wall Street’s white-glove firms, and it may be among the best buys in the banking and investment arena. Morgan Stanley (NYSE: MS) is a global investment bank with leading positions in investment banking (M&A and equity underwriting), equity trading and wealth management, which contributes nearly 50% of firmwide revenues. The firm also has an asset management business, which adds to the lower-risk business profile the firm has pursued since the financial crisis.

Earlier this year, the Wall Street investment bank agreed on a $13 billion purchase of discount brokerage E-Trade. With 5.2 million customers, it was once a revolutionary platform that “helped usher in a dramatic shift among financial services firms” and fueled the rise of indexes and exchange-traded funds, making investing vastly easier for do-it-yourself investors. The deal is still expected to close.

Morgan Stanley stock investors receive a 3.78% dividend. The $47 Goldman Sachs price target is in line with the $47.02 consensus target. Shares closed Wednesday at $36.99, down close to 4% on the day.

T-Mobile

This company finally completed a long and arduous pursuit of former rival communication company Sprint. T-Mobile US Inc. (NASDAQ: TMUS) provides wireless services for branded postpaid, prepaid and wholesale customers in the United States, Puerto Rico and the United States Virgin Islands.

The company offers voice, messaging and data services. It also provides wireless devices, including smartphones, wearables, tablets and other mobile communication devices, as well as accessories and wireline services. It offers its services under the T-Mobile, Metro by T-Mobile and Sprint brands.

Now that the Sprint deal finally has closed, it could bring about a seismic shift in the mobile world. T-Mobile and Sprint’s combined assets could jump-start their 5G ambitions, pushing the industry further into the next-generation technology. They’ve also said they’ll lock in consumer prices for at least three years. As part of all the wrangling, Dish Network will become the fourth national carrier, giving consumers a new alternative.

Goldman Sachs has set a $123 price objective. The much lower consensus target is $101.05, and T-Mobile closed most recently at $92.78.

United Rentals

This stock has rallied well of the March lows but still has solid upside potential, as the gear and equipment they provide is always needed. United Rentals Inc. (NYSE: URI) is the largest equipment rental company in the world.

It has an integrated network of 876 rental locations in 49 states and 10 Canadian provinces. With approximately 12,200 employees, the company serves construction and industrial customers, utilities, municipalities, homeowners and others.

United Rentals offers for rent approximately 3,300 classes of equipment with a total original cost of $8.7 billion. Trading at 10.5 times trailing 12-month earnings, the stock remains very cheap. With the economy opening back up, rentals should increase exponentially.

The Goldman Sachs price target is a lofty $154. The consensus target is $134.83, and United Rentals stock closed on Wednesday at $108.77.

The stock market is a forward-looking instrument, so buying stocks of companies that the analysts predict will post higher than expected earnings could be a solid strategy now. With that noted, volatility will remain in place, and we are a long way from the economy turning around, so caution should be used in the size of positions taken.

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