Why this BofA strategist is predicting a strong cyclical and value stocks recovery - Business Insider

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Why this BofA analyst is predicting a strong cyclical and value stocks recovery

on Monday that while she is not seeing a "whole-hearted value rotation," she has reasons to favor cyclical and value stocks. The strategist said that over the last century, in "14 out of the 14 last recessions, in the recovery we've had value outperform growth over at least a three-month period." She added that in the earlier stages of cyclical recovery, investors should buy the "most beaten-down, GDP sensitive names that are likely to spring back the hardest.

Subramanian also said that the market has had such a long growth cycle that there are "record levels of crowding and valuation in the growth cohort, in the tech companies, in those stay-at-home tech beneficiaries." There's a "positioning valuation story that supports a rotation into cyclical companies," she said.

Subramanian added: "The trick is to be selective when it comes to value," but did not specify any particular value picks to CNBC.

 

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