Banking

Credit Suisse says to buy these 47 stocks set to capitalize on an inevitable economic acceleration after a dismal August jobs report

  • The Labor Department says employers hired a third as many people as experts expected in August.
  • Evidence that the COVID-19 Delta variant is hurting the economy piled up even as stocks rose.
  • Credit Suisse says these economically-sensitive stocks will outperform as the recovery speeds up.
  • See more stories on Insider’s business page.

The US jobs report for the month of August was splash of cold water thrown in investors’ faces, but experts say the shock won’t last long.

While the COVID-19 Delta variant walloped hiring and dramatically slowed the pace of the economic recovery, Credit Suisse says investors shouldn’t lose hope – and that the shape and trajectory of that recovery hasn’t really changed. Neither has its effect on the stock market.

The jobs report wasn’t the first development in August that worried investors. Research analyst Patrick Palfrey notes that for the month, economically-sensitive stocks didn’t perform that well as investors fretted about the Delta variant, falling GDP forecasts, and supply chain problems.

Stocks did very well overall and the S&P 500 index numerous set records, but Palfrey writes that many of the gains went to growth stocks instead of cyclicals. He says the stocks that were overlooked in August have that much more upside as a result.

“While there may seem to be a disconnect between a hobbled economy and record returns, longer-term conditions remain favorable,” he wrote. He pointed out that the supply chain problems will give way to a wave of inventory refilling, and analysts are getting more optimistic about corporate profits in 2021.

He explains that cyclical stocks like industrials are the subject of some of the most positive changes in Wall Street estimates.

“Against these conditions, the market is likely to shift pro-cyclically, with leadership coming from stocks that are most sensitive to the economy’s advance,” Palfrey said.

With that in mind, the firm is maintaining a diversified list of 47 stocks it expects to thrive as the recovery solidifies and then accelerates.

“These companies exhibit a high degree of economic sensitivity and were rated Outperform by Credit Suisse Analysts,” Palfrey wrote, meaning they’re expected to beat their respective benchmarks over the next year.

Devon Energy

Devon Energy
Devon Energy



Ticker: DVN

Sector: Energy

Market cap: $19.1 billion

Source: Credit Suisse

Diamondback Energy

Diamondback Energy
Diamondback Energy



Ticker: FANG

Sector: Energy

Market cap:

Source: Credit Suisse

Targa Resources

Targa Resources
Targa Resources



Ticker: TRGP

Sector: Energy

Market cap: $10.0 billion

Source: Credit Suisse

Alcoa

Alcoa
Alcoa



Ticker: AA

Sector: Materials

Market cap: $8.5 billion

Source: Credit Suisse

 

US Steel

US Steel
US Steel



Ticker: X

Sector: Materials

Market cap: $7.3 billion

Source: Credit Suisse

 

Cleveland-Cliffs

Cleveland-Cliffs
Cleveland-Cliffs



Ticker: CLF

Sector: Materials

Market cap: $12.0 billion

Source: Credit Suisse

 

Steel Dynamics

Steel Dynamics
Steel Dynamics



Ticker: STLD

Sector: Materials

Market cap: $13.7 billion

Source: Credit Suisse

 

Nucor

Nucor
Nucor



Ticker: NUE

Sector: Materials

Market cap: $34.2 billion

Source: Credit Suisse

Air Lease

Air Lease
Air Lease



Ticker: AL

Sector: Industrials

Market cap: $4.5 billion

Source: Credit Suisse

Flowserve

Flowserve
Flowserve



Ticker: FLS

Sector: Industrials

Market cap: $5.0 billion

Source: Credit Suisse

Oshkosh

Oshkosh
Oshkosh



Ticker: OSK

Sector:  Industrials

Market cap: $7.8 billion

Source: Credit Suisse

Parker-Hannifin

Parker-Hannifin
Parker-Hannifin



Ticker: PH

Sector: Industrials

Market cap: $38.0 billion

Source: Credit Suisse

SunRun

Sunrun
Sunrun



Ticker: RUN

Sector: Industrials

Market cap: $9.7 billion

Source: Credit Suisse

MasTec

MasTec
MasTec



Ticker: MTZ

Sector: Industrials

Market cap: $6.6 billion

Source: Credit Suisse

PVH

PVH
PVH



Ticker: PVH

Sector: Consumer discretionary

Market cap: $8.6 billion

Source: Credit Suisse

Norwegian Cruise Line

Norwegian Cruise Line
Norwegian Cruise Line



Ticker: NCLH

Sector: Consumer discretionary

Market cap: $9.3 billion

Source: Credit Suisse

Royal Caribbean

Royal Caribbean Cruises
Royal Caribbean Cruises



Ticker: RCL

Sector: Consumer discretionary

Market cap: $20.9 billion

Source: Credit Suisse

Carnival

Carnival
Carnival



Ticker: CCL

Sector: Consumer discretionary

Market cap: $26.5 billion

Source: Credit Suisse

 

 

Marriot Vacations

Marriott Vacations
Marriott Vacations



Ticker: VAC

Sector: Consumer discretionary

Market cap: $6.4 billion

Source: Credit Suisse

Penn National Gaming

Penn National Gaming
Penn National Gaming



Ticker: PENN

Sector: Consumer discretionary

Market cap: $12.8 billion

Source: Credit Suisse

Darling Ingredients

Darling Ingredients
Darling Ingredients



Ticker: DAR

Sector: Consumer staples

Market cap: $12.1 billion

Source: Credit Suisse

US Foods

US Foods
US Foods



Ticker: USFD

Sector: Consumer staples

Market cap: $7.6 billion

Source: Credit Suisse

Sysco

Sysco
Sysco



Ticker: SYY

Sector: Consumer staples

Market cap: $40.4 billion

Source: Credit Suisse

Estee Lauder

Estee Lauder
Estee Lauder



Ticker: EL

Sector: Consumer staples

Market cap: $124.5 billion

Source: Credit Suisse

Bunge

Bunge
Bunge



Ticker: BG

Sector: Consumer staples

Market cap: $10.7 billion

Source: Credit Suisse

 

Constellation Brands

Constellation Brands
Constellation Brands



Ticker: STZ

Sector: Consumer staples

Market cap: $40.8 billion

Source: Credit Suisse

Envista Holdings

Envista
Envista



Ticker: NVST

Sector:  Healthcare

Market cap: $6.9 billion

Source: Credit Suisse

Align Technology

Align Technology
Align Technology



Ticker: ALGN

Sector: Healthcare

Market cap: $56.9 billion

Source: Credit Suisse

Syneos Health

Syneos Health
Syneos Health



Ticker: SYNH

Sector: Healthcare

Market cap: $9.7 billion

Source: Credit Suisse

Acceleron Pharma

Acceleron
Acceleron



Ticker: XLRN

Sector: Healthcare

Market cap: $7.9 billion

Source: Credit Suisse

Universal Health Services

Universal Health Services
Universal Health Services



Ticker: UHS

Sector: Healthcare

Market cap: $12.9 billion

Source: Credit Suisse

Cigna

Cigna
Cigna



Ticker: CI

Sector: Healthcare

Market cap: $71.8 billion

Source: Credit Suisse

Principal Financial Group

Principal Financial
Principal Financial



Ticker: PFG

Sector: Financials

Market cap: $17.7 billion

Source: Credit Suisse

Discover Financial Services

Discover Financial
Discover Financial



Ticker: DFS

Sector: Financials

Market cap: $37.4 billion

Source: Credit Suisse

Equitable Holdings

Equitable Holdings
Equitable Holdings



Ticker: EQH

Sector: Financials

Market cap: $12.8 billion

Source: Credit Suisse

Ameriprise Financial

Ameriprise
Ameriprise



Ticker: AMP

Sector: Financials

Market cap: $31.0 billion

Source: Credit Suisse

Synchrony Financial

Synchrony Financial
Synchrony Financial



Ticker: SYF

Sector: Financials

Market cap: $27.7 billion

Source: Credit Suisse

Citigroup

Citigroup
Citigroup



Ticker: C

Sector: Financials

Market cap: $144.7 billion

Source: Credit Suisse

CommScope

Commscope
CommScope



Ticker: COMM

Sector: Information technology

Market cap: $3.2 billion

Source: Credit Suisse

Micron Technology

Micron Technology
Micron Technology



Ticker: MU

Sector: Information technology

Market cap: $83 billion

Source: Credit Suisse

Square

Square
Square



Ticker: SQ

Sector: Information technology

Market cap: $123.5 billion

Source: Credit Suisse

NXP Semiconductors

NXP Semiconductors
NXP Semiconductors



Ticker: NXPI

Sector: Information technology

Market cap: $56.3 billion

Source: Credit Suisse

Microchip Technology

Microchip Technology
Microchip Technology



Ticker: MCHP

Sector: Information technology

Market cap: $42.6 billion

Source: Credit Suisse

Applied Materials

Applied Materials
Applied Materials



Ticker: AMAT

Sector: Information technology

Market cap: $120.6 billion

Source: Credit Suisse

News Corp

News Corp
News Corp



Ticker: NWSA

Sector: Communication services

Market cap: $13.5 billion

Source: Credit Suisse

Alphabet

Alphabet
Alphabet



Ticker: GOOGL

Sector: Communication services

Market cap: $1.94 trillion

Source: Credit Suisse

 

Discovery

Discovery Communications
Discovery Communications



Ticker: DISCA

Sector: Communication services

Market cap: $14.0 billion

Source: Credit Suisse

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