Stocks to buy for the best growth opportunities in the market: RBC

  • Stocks are skidding in 2022 as investors believe a recession is becoming more likely.
  • RBC Capital Markets says many “safe” core investments are now overvalued.
  • The company recently analyzed the best growth and defensive opportunities it is considering.

The first six months of 2022 were the worst first half of the year for stocks in more than 50 years – and so far things haven’t improved in the second half.

It is therefore understandable that investors want to bet on stable, low-risk defensive assets. But RBC Capital Markets cautions traders against going that route over the next six to 12 months. RBC says these stocks are getting expensive, limiting their value.

“Our strategy team continues to believe that stock market leadership is shifting from value to growth and defensive areas have started to look over-held and overvalued,” the company said in a new report from the global head of strategy. research Graeme Pearson, responsible for the United States. Research Mark Odendahl, Head of Research Canada and APAC André‐Philippe Hardy, and Head of European Research Michael Hall.

RBC recently updated its list of favorite stocks for the year, and it is adding exposure to real estate and utility companies – traditionally defensive areas. But RBC continues to overweight industrials, energy companies and banks. These three sectors are closely linked to the economic cycle.

So far, his stock picking approach has worked well. “Since the inception of our quarterly list at the end of 2019, the Top 30 have generated a total return of +20.8%, above the benchmark at +13.2%”, have said the strategists.

The 29 stocks below are ranked from lowest to highest based on their overall implied return over the next year. This figure combines the amount of RBC’s price target hike with annual dividend payments for companies that pay dividends. All figures were calculated based on Tuesday’s closing prices.

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