Betting on the post-pandemic boom? Bank of America has 17 stock recommendations

By Barbara Kollmeyer

Here’s one possible all-clear signal. COVID-19 is no longer a “tail risk” for investors, the first time since February 2020, says Bank of America in its latest fund manager survey. A tail risk is an unlikely event that could cause outsize losses or gains.

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Meanwhile, the Federal Reserve’s two-day policy meeting begins on Tuesday, and investors will be on the lookout for any hawkish signals that could take some steam out of stocks. The premarket is showing some mixed action after some disappointment over retail sales.

But many remain stuck into the idea of a post-pandemic boom, at least in the U.S. as vaccinations roll out.

Read: Value stocks are making a comeback. Don’t get left behind, these analysts say

That has kept the records coming for the Dow Jones Industrial Average /zigman2/quotes/210598065/realtime DJIA +1.06% and S&P 500 /zigman2/quotes/210599714/realtime SPX +1.49% and those stocks geared toward a recovery. Our call of the day comes from strategists at Bank of America, who offer up 17 stocks to buy for the three R’s they see coming — recovery, reflation and rerating.

Strategists Jill Carey, Savita Subramanian and Ohsung Kwon say the economy has reached the mid-cycle phase, where inflation typically is strongest. In prior such phases, excluding the technology bubble, small-caps have outperformed larger ones, and value has beaten growth.

The Bank of America team says there are two reasons to like those stocks: many of the companies they highlight are still not expensive, and active funds aren’t positioning for that rising inflation, with heavier exposure to mega than smaller caps.

Onto the stocks (nearly half are small-to-midcap companies)…

Alcoa /zigman2/quotes/200686102/composite AA +1.46% — BofA has a share price target $37 for the miner. Aluminum prices could go either way, but global demand growth is a plus for Alcoa.

Axalta Coating Systems /zigman2/quotes/204422049/composite AXTA -0.31% — Share price target £37 for the global coatings group. The pace of automobile recovery will be key and a stronger dollar and lower raw material costs could be a boost.

Broadcom /zigman2/quotes/200646538/composite AVGO +2.56% — Share price target $550. Risks for the semiconductor company include sensitivity to U.S.-China trade relations and competition in networking, smartphone and other markets.

Hess /zigman2/quotes/203832174/composite HES +6.13% — Share price target $95. Among the energy company’s risks are oil and gas prices, as well as slowing developments in drilling.

Marriott International /zigman2/quotes/200170042/composite MAR +2.89% — Share price objective $150. Economic weakness and worse-than-expected spending by businesses and consumers are among the risks for the hospitality company.

Walt Disney /zigman2/quotes/203410047/composite DIS -2.60% — $223 price objective for the entertainment giant that has “best in class assets.” Downside risks include slowing ESPN growth from people deciding not to keep a cable television subscription, weaker consumer confidence, and low theme park attendance. Also watch out for potential film flops.

As for the rest, they like CNH Industrial /zigman2/quotes/205520883/composite CNHI +2.90% , Comcast /zigman2/quotes/209472081/composite CMCSA +2.25% , Emerson Electric /zigman2/quotes/200181610/composite EMR +1.19% , Herc Holdings /zigman2/quotes/209084505/composite HRI +4.80% , Knight-Swift Transportation /zigman2/quotes/206974312/composite KNX -0.14% , Occidental Petroleum /zigman2/quotes/207018272/composite OXY +5.86% , Parker Hannifin /zigman2/quotes/202924304/composite PH +1.78% , Principal Financial /zigman2/quotes/201030797/composite PFG +2.36% , Robert Half International /zigman2/quotes/209666445/composite RHI +1.70% , Union Pacific /zigman2/quotes/209717171/composite UNP +1.19% and World Fuel Services /zigman2/quotes/201809068/composite INT +5.72% .

/zigman2/quotes/210598065/realtime

Add to watchlist DJIA

Dow Jones Industrial Average

US : Dow Jones Global

34,382.13

+360.68 +1.06%

Volume: 307.38M

May 14, 2021 5:02p

/zigman2/quotes/210599714/realtime

Add to watchlist SPX

S&P 500 Index

US : S&P US

4,173.85

+61.35 +1.49%

Volume: 1.91B

May 14, 2021 5:02p

/zigman2/quotes/200686102/composite

Add to watchlist AA

Alcoa Corp.

US : U.S.: NYSE

$ 39.70

+0.57 +1.46%

Volume: 4.72M

May 14, 2021 4:00p

P/E Ratio

N/A

Dividend Yield

N/A

Market Cap

$7.41 billion

Rev. per Employee

$726,512

/zigman2/quotes/204422049/composite

Add to watchlist AXTA

Axalta Coating Systems Ltd.

US : U.S.: NYSE

$ 32.64

-0.10 -0.31%

Volume: 2.48M

May 14, 2021 4:00p

P/E Ratio

91.76

Dividend Yield

N/A

Market Cap

$7.60 billion

Rev. per Employee

$287,508

/zigman2/quotes/200646538/composite

Add to watchlist AVGO

Broadcom Inc.

US : U.S.: Nasdaq

$ 441.62

+11.02 +2.56%

Volume: 1.70M

May 14, 2021 4:00p

P/E Ratio

51.31

Dividend Yield

3.26%

Market Cap

$180.31 billion

Rev. per Employee

$1.14M

/zigman2/quotes/203832174/composite

Add to watchlist HES

Hess Corp.

US : U.S.: NYSE

$ 84.33

+4.87 +6.13%

Volume: 1.96M

May 14, 2021 4:00p

P/E Ratio

N/A

Dividend Yield

1.19%

Market Cap

$26.01 billion

Rev. per Employee

$2.54M

/zigman2/quotes/200170042/composite

Add to watchlist MAR

Marriott International Inc.

US : U.S.: Nasdaq

$ 143.29

+4.02 +2.89%

Volume: 2.20M

May 14, 2021 4:00p

P/E Ratio

N/A

Dividend Yield

0.00%

Market Cap

$46.66 billion

Rev. per Employee

$87,893

/zigman2/quotes/203410047/composite

Add to watchlist DIS

Walt Disney Co.

US : U.S.: NYSE

$ 173.70

-4.64 -2.60%

Volume: 33.15M

May 14, 2021 4:04p

P/E Ratio

N/A

Dividend Yield

0.00%

Market Cap

$315.31 billion

Rev. per Employee

$320,813

/zigman2/quotes/205520883/composite

Add to watchlist CNHI

CNH Industrial N.V.

US : U.S.: NYSE

$ 17.01

+0.48 +2.90%

Volume: 2.73M

May 14, 2021 4:00p

P/E Ratio

N/A

Dividend Yield

0.78%

Market Cap

$23.03 billion

Rev. per Employee

$406,758

/zigman2/quotes/209472081/composite

Add to watchlist CMCSA

Comcast Corp. Cl A

US : U.S.: Nasdaq

$ 58.68

+1.29 +2.25%

Volume: 15.86M

May 14, 2021 4:00p

P/E Ratio

23.23

Dividend Yield

1.70%

Market Cap

$269.59 billion

Rev. per Employee

$616,452

/zigman2/quotes/200181610/composite

Add to watchlist EMR

Emerson Electric Co.

US : U.S.: NYSE

$ 95.84

+1.13 +1.19%

Volume: 1.94M

May 14, 2021 4:02p

P/E Ratio

27.09

Dividend Yield

2.11%

Market Cap

$57.48 billion

Rev. per Employee

$201,078

/zigman2/quotes/209084505/composite

Add to watchlist HRI

Herc Holdings Inc.

US : U.S.: NYSE

$ 106.51

+4.88 +4.80%

Volume: 114,257

May 14, 2021 4:00p

P/E Ratio

28.77

Dividend Yield

N/A

Market Cap

$3.15 billion

Rev. per Employee

$371,104

/zigman2/quotes/206974312/composite

Add to watchlist KNX

Knight-Swift Transportation Holdings Inc. Cl A

US : U.S.: NYSE

$ 48.88

-0.07 -0.14%

Volume: 857,163

May 14, 2021 4:00p

P/E Ratio

17.48

Dividend Yield

0.82%

Market Cap

$8.09 billion

Rev. per Employee

$205,897

/zigman2/quotes/207018272/composite

Add to watchlist OXY

Occidental Petroleum Corp.

US : U.S.: NYSE

$ 25.10

+1.39 +5.86%

Volume: 19.64M

May 14, 2021 4:00p

P/E Ratio

N/A

Dividend Yield

0.16%

Market Cap

$23.43 billion

Rev. per Employee

$1.45M

/zigman2/quotes/202924304/composite

Add to watchlist PH

Parker Hannifin Corp.

US : U.S.: NYSE

$ 321.84

+5.63 +1.78%

Volume: 807,991

May 14, 2021 4:00p

P/E Ratio

27.40

Dividend Yield

1.28%

Market Cap

$41.54 billion

Rev. per Employee

$271,091

/zigman2/quotes/201030797/composite

Add to watchlist PFG

Principal Financial Group Inc.

US : U.S.: Nasdaq

$ 66.83

+1.54 +2.36%

Volume: 890,651

May 14, 2021 4:00p

P/E Ratio

11.37

Dividend Yield

3.65%

Market Cap

$18.18 billion

Rev. per Employee

$847,224

/zigman2/quotes/209666445/composite

Add to watchlist RHI

Robert Half International Inc.

US : U.S.: NYSE

$ 90.12

+1.51 +1.70%

Volume: 535,943

May 14, 2021 4:03p

P/E Ratio

31.12

Dividend Yield

1.69%

Market Cap

$10.16 billion

Rev. per Employee

$31,248

/zigman2/quotes/209717171/composite

Add to watchlist UNP

Union Pacific Corp.

US : U.S.: NYSE

$ 227.86

+2.68 +1.19%

Volume: 1.63M

May 14, 2021 4:00p

P/E Ratio

29.47

Dividend Yield

1.88%

Market Cap

$151.37 billion

Rev. per Employee

$630,911

/zigman2/quotes/201809068/composite

Add to watchlist INT

World Fuel Services Corp.

US : U.S.: NYSE

$ 33.80

+1.83 +5.72%

Volume: 376,645

May 14, 2021 4:00p

P/E Ratio

24.70

Dividend Yield

1.42%

Market Cap

$2.14 billion

Rev. per Employee

$4.67M