Has the stock market bottomed? If so, which stocks and sectors should investors be looking at? These are two very common questions asked by investors in 2016, after the Dow Jones Industrial Average and S&P 500 are both down year to date after there was effectively a six-year rally. What investors should be buying this time around in 2016, if they think the market is trying to find a bottom, may be very different from past rallies.

This year likely will be one of quality rather than just picking the most battered stocks with high valuations. That generally means well-established, large cap stocks with rock-solid businesses, now and 10 years from now.

24/7 Wall St. tracks dozens of analyst upgrades and downgrades each day of the week. This in turn means hundreds of analyst calls each week. This past week brought several key upgrades in the companies that are deemed as mega-cap stocks, those with market capitalization rates of more than $100 billion. We did not limit this to stocks with a firm $100 billion market cap because some stocks have sold off enough that they may have dipped back under that line.

Right now we are tracking far more downgrades or analysts cutting their price targets and earnings estimates. That means that upgrades really stand out right now. It also means that some analysts are willing to go against the herd and are trying to look for better opportunities after a big sell-off.

It is imperative to keep a couple of things in mind. The first and most important is that no one can truly ever pick a bottom without a lot of luck, and the second is that for each analyst upgrade right now it seems that there are a half-dozen reports on the same company that would be far less enthusiastic.

These are the top mega-cap stocks that received analyst upgrades in the week ending February 19.

Amazon.com Inc. (NASDAQ: AMZN) was raised to Buy from Hold at Canaccord Genuity on February 18. Its price target was raised to $750 from $600 in the call, and the analysts did admit that he missed much of the 2015 upswing but has reasons to be very bullish now. What was different here is that the analyst upgraded Amazon after a huge sell-off rather than on the way up or at the top like so many other analysts did. Amazon closed at $534.10 before that call, and shares were at $534.90 at week’s end. Amazon has a consensus analyst price target of almost $742, and its 52-week trading range is $365.65 to $696.44.

Goldman Sachs Group Inc. (NYSE: GS) was raised to Overweight from Underweight at JPMorgan on February 16. The leader of investment banking giants saw its price target get raised to $180 from $170, compared with a prior $146.13 close and Friday’s close of $146.91. Goldman Sachs was called out as being too cheap to ignore by JPMorgan, with material value seen in the top U.S.-based investment banks. Goldman Sachs now has a consensus price target of $195.38 and a 52-week range of $139.05 to $218.77.

International Business Machines Corp. (NYSE: IBM) was raised to Overweight from Equal Weight and the price target was raised to $140 from $135 at Morgan Stanley. This call was made on February 18, and IBM closed out the week at $133.08, up handily from the prior Friday’s close of $121.04. This upgrade may not sound like massive upside, but investors need to remember that everyone has been bashing IBM. Morgan Stanley even said that many of IBM’s efforts are now underappreciated.

Schlumberger Ltd. (NYSE: SLB) has fallen back under the $100 billion market cap (at $91 billion), but everyone is aware of the state of oil and gas market by now. The firm D.A. Davidson initiated coverage on Schlumberger at Buy on February 19 and issued a $94.00 price target. That compares with a $72.68 prior close and Friday’s close of $72.87. Schlumberger has a consensus analyst target of $81.78 and a 52-week range of $59.60 to $95.13.

Starbucks Corp. (NASDAQ: SBUX) may not quite be a mega-cap yet, but the coffee giant will be one day if the company’s vision plays out (it’s above $85 billion now). Starbucks was started as Buy at Nomura on February 18, with a price target of $70.00. Friday’s close was $57.67 and the consensus analyst target is $68.26. Starbucks has a 52-week trading range of $42.05 to $64.00. The key driver here is Starbucks’ high customer frequency, which is about the best of them all in America. A potential gain in market share was also cited.

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Additional analyst and market value reports of interest:

• 4 Great Defensive Stocks Now Valued With Massive Premiums
• Merrill Lynch Has 4 Top Gold Picks With Higher Targets
• RBC Capital Shows Why Now Is the Time to Buy the Top Banks

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