Bank of America flags 26 stocks to buy that are also hugely popular among giant Wall Street investors

trader nyse celebrate — Reuters / Brendan McDermid

Bank of America says investors think the current rally will continue, and aren’t positioned for anything else.
Strategist Savita Subramanian says investors may want to reduce the volatility in their portfolios.
She highlights stocks with very concentrated ownership that could be volatile, but all carry “Buy” ratings.
See more stories on Insider’s business page.

With stocks at record highs and the market relinquishing some of its fears about inflation, it seems like good times are ahead.

And that might be true. But Savita Subramanian, head of US Equity Strategy and US Quantitative Strategy for Bank of America, says a huge chunk of investors are positioned for that outcome and nothing else. That means there’s a risk of severe losses if reality doesn’t live up to what the market is expecting.

“What may be equally painful is anything besides a continued rally,” she wrote in a note to clients. “Funds are positioned for continued strong market gains. With near term pressures building, reducing one’s beta may be prudent ahead of what could be a weaker second half for stocks.”

Subramanian notes that many investors are placing large bets on companies that depend on sales overseas, and the new proposed global corporate tax rate doesn’t seem to be priced in.

She says another factor to watch our for is highly concentrated stock ownership because it’s a source of potential volatility. But not all stocks with concentrated ownership are traps.

Subramanian and her team named 26 companies where at least half of the outstanding shares are held by the 10 largest investors, but which still have “Buy” ratings from Bank of America. Those stocks may be subject to more volatility, but the firm’s analysts think they’ll be worth the risk over the next year or more.

Below, those stocks are ranked from lowest to highest based on how much of the stock is held by those 10 largest shareholders.

26. Sealed Air

Ticker: SEE

Sector: Materials

Market cap: $8.9 billion

Percentage of shares held by top 10 owners: 50%

Source: Bank of America

25. Occidental Petroleum

Ticker: OXY

Sector: Energy

Market cap: $26.4 billion

Percentage of shares held by top 10 owners: 50%

Source: Bank of America

24. Packaging Corp

Ticker: PKG

Sector: Materials

Market cap: $13.7 billion

Percentage of shares held by top 10 owners: 51%

Source: Bank of America

23. NiSource

Ticker: NI

Sector: Utilities

Market cap: $10.2 billion

Percentage of shares held by top 10 owners: 51%

Source: Bank of America

22. Assurant

Ticker: AIZ

Sector: Financials

Market cap: $9.9 billion

Percentage of shares held by top 10 owners: 52%

Source: Bank of America

21. AES

Ticker: AES

Sector: Utilities

Market cap: $17.2 billion

Percentage of shares held by top 10 owners: 53%

Source: Bank of America

20. NetApp

Ticker: NTAP

Sector: Information technology

Market cap: $18.6 billion

Percentage of shares held by top 10 owners: 53%

Source: Bank of America

19. Teledyne Technologies

Ticker: TDY

Sector: Industrials

Market cap: $19.7 billion

Percentage of shares held by top 10 owners: 53%

Source: Bank of America

18. Dish Network

Ticker: DISH

Sector: Communication services

Market cap: $21.1 billion

Percentage of shares held by top 10 owners: 53%

Source: Bank of America

17. APA

Ticker: APA

Sector: Energy

Market cap: $8.6 billion

Percentage of shares held by top 10 owners: 54%

Source: Bank of America

16. Duke Realty

Ticker: DRE

Sector: Real estate

Market cap: $18.5 billion

Percentage of shares held by top 10 owners: 54%

Source: Bank of America

15. LyondellBasell Industries

Ticker: LYB

Sector: Materials

Market cap: $36.8 billion

Percentage of shares held by top 10 owners: 54%

Source: Bank of America

14. Hologic

Ticker: HOLX

Sector: Healthcare

Market cap: $16.2 billion

Percentage of shares held by top 10 owners: 55%

Source: Bank of America

13. Seagate Technology

Ticker: STX

Sector: Information technology

Market cap: $23.6 billion

Percentage of shares held by top 10 owners: 55%

Source: Bank of America

12. Charles Schwab

Ticker: SCHW

Sector: Financials

Market cap: $133.5 billion

Percentage of shares held by top 10 owners: 55%

Source: Bank of America

11. Fox Corp

Ticker: FOXA

Sector: Communication services

Market cap: $22.0 billion

Percentage of shares held by top 10 owners: 55%

Source: Bank of America

10. Penn National Gaming

Ticker: PENN

Sector: Consumer discretionary

Market cap: $13.1 billion

Percentage of shares held by top 10 owners: 55%

Source: Bank of America

9. UDR

Ticker: UDR

Sector: Real estate

Market cap: $14.9 billion

Percentage of shares held by top 10 owners: 56%

Source: Bank of America

8. Under Armour

Ticker: UAA

Sector: Consumer discretionary

Market cap: $9.8 billion

Percentage of shares held by top 10 owners: 56%

Source: Bank of America

7. PVH

Ticker: PVH

Sector: Consumer discretionary

Market cap: $8.1 billion

Percentage of shares held by top 10 owners: 57%

Source: Bank of America

6. General Dynamics

Ticker: GD

Sector: Industrials

Market cap: $54.1 billion

Percentage of shares held by top 10 owners: 57%

Source: Bank of America

5. Baker Hughes

Ticker: BKR

Sector: Energy

Market cap: $20.0 billion

Percentage of shares held by top 10 owners: 59%

Source: Bank of America

4. Regency Centers

Ticker: REG

Sector: Real estate

Market cap:

Percentage of shares held by top 10 owners: 59%

Source: Bank of America

3. Kellogg

Ticker: K

Sector: Consumer staples

Market cap: $22.2 billion

Percentage of shares held by top 10 owners: 70%

Source: Bank of America

2. Incyte

Ticker: INCY

Sector: Healthcare

Market cap: $18.2 billion

Percentage of shares held by top 10 owners: 72%

Source: Bank of America

1. Kraft Heinz

Ticker: KHC

Sector: Consumer staples

Market cap: $53.1 billion

Percentage of shares held by top 10 owners: 78%

Source: Bank of America

Published at Wed, 16 Jun 2021 12:06:02 +0000