Investing

Top ESG Fund Managers Love and Own These 5 Blue Chip Leaders

The stock market is an ever-evolving giant that over the years has taken on many new forms. Investors in the 1980s had no idea what a dot-com boom was going to be. Similarly, those investing in the 1990s and early 2000s had little idea of cloud computing or the Internet of Things. Now already over two decades into the new century, one of the biggest new areas for investors are stocks that are in the environmental, social and governance (ESG) basket. While this does not represent a new technology or health care breakthrough, conscientious investors will look for companies that have the traits that better represent their personal aspirations.

Environmental, social and governance refer to the three central factors in measuring the sustainability and societal impact of an investment in a company or business. These criteria help to better determine the future financial performance of companies (return and risk).

A new BofA Securities report focuses on the holdings that the top ESG fund managers have, and we zeroed in on the stocks that were the most widely held. We then screened the top five for Buy ratings across Wall Street, which not surprisingly all five have many of them. It is important to remember that no single analyst report should be used as a sole basis for any buying or selling decision.

Adobe Systems

This high-profile legacy software company can be found in the portfolio of 31% of ESG funds. Adobe Systems Inc. (NASDAQ: ADBE) operates in three segments: Digital Media, Digital Marketing and Print and Publishing. The Digital Media segment provides tools and solutions that enable individuals, small and medium businesses, and enterprises to create, publish, promote and monetize their digital content.

Top Wall Street analysts see the company benefiting from artificial intelligence, predictive analytics, automation bots, speech recognition and natural language processing and image recognition. Flagship products include Creative Suite, Photoshop, Acrobat, Premiere, Dreamweaver, Illustrator, InDesign and LiveCycle. PDF and flash technologies from the company have become industry standards and act as a platform for other Adobe products.

The Goldman Sachs price target for the shares is $665, while the consensus target is just $618.99. The final Adobe Systems stock trade on Thursday came in at $605.95 a share.