With the first quarter of 2021 underway, many of the top firms we follow on Wall Street are making some changes to the lists of their high-conviction stock picks for clients. With the market hitting all-time highs recently on all the major indexes, it makes sense to examine the lists as the rest of the year could have some additional volatility, as the political and geopolitical cycle could still prove to be very explosive components.

The fourth-quarter earnings ready to start pouring in this week, and the analysts at BofA Securities have made some big changes to the firm’s US 1 list of top stock recommendations. Five new stocks were added, and three that have performed admirably are being removed.

While all five of the new members are rated Buy at BofA Securities, it is important to remember that no single analyst report should be used as a sole basis for any buying or selling decision.

Applied Materials

This is one of the premier semiconductor capital equipment stocks and is a great tech addition for more aggressive investors. Applied Materials Inc. (NASDAQ: AMAT) provides manufacturing equipment, services and software to the semiconductor, display and related industries. It operates through three segments.

The Semiconductor Systems segment develops, manufactures and sells various manufacturing equipment that is used to fabricate semiconductor chips or integrated circuits. This segment also offers various technologies, including epitaxy, ion implantation, oxidation/nitridation, rapid thermal processing, physical vapor deposition, chemical vapor deposition, chemical mechanical planarization, electrochemical deposition, atomic layer deposition, etching and selective deposition and removal, as well as metrology and inspection tools.

The Applied Global Services segment provides integrated solutions to optimize equipment and fab performance and productivity comprising spares, upgrades, services, remanufactured earlier generation equipment and factory automation software for semiconductor, display and other products.

The Display and Adjacent Markets segment offers products for manufacturing liquid crystal displays, organic light-emitting diodes and other display technologies for TVs, monitors, laptops, personal computers, electronic tablets, smartphones and other consumer-oriented devices, as well as equipment for processing flexible substrates.

Investors receive just a 0.91% dividend. The BofA Securities price target for the shares is $115, while the Wall Street consensus is much lower at $92.56. Applied Materials stock closed trading on Monday at $97.96 a share, after almost a 3% gain on the day.

Despite a solid move of the 2020 lows, this top money center bank is still trading almost 20% below levels from early last year. Citigroup Inc. (NYSE: C) has approximately 200 million customer accounts and does business in more than 160 countries and jurisdictions. Citi provides consumers, corporations, governments and institutions with a broad range of financial products and services, including consumer banking and credit, corporate and investment banking, securities brokerage, transaction services and wealth management.

Trading at a still very cheap 9.9 times estimated 2021 earnings, this stock looks very reasonable in what remains a volatile stock market and in a sector that has lagged dramatically.

Citigroup stock investors receive 3.07% dividend. BofA Securities has a massive $100 price target, while the consensus price objective is $73.11. The shares closed trading most recently at $66.44.

Crown Castle International

Shares of this top cell tower company offers incredible growth and income possibilities. Crown Castle International Corp. (NYSE: CCI) is one of the largest U.S. wireless tower companies, with over 40,000 towers and approximately 80,000 route miles of fiber supporting small cells and fiber solutions across every major U.S. market. The core business for the company is leasing space on its wireless towers primarily to wireless carriers, government agencies and broadband data providers.

Crown Castle is one of the best stocks in the group for more conservative investors as the high-yield distribution and low volatility make it a good holding for accounts seeking growth and income with less risk.

Investors receive a 3.48% distribution. The $185 BofA Securities price target compares with the $177.06 consensus target. Crown Castle International stock closed at $153.06 a share on Monday.

Investors looking for a somewhat contrarian play may like this idea. Duke Realty Corp. (NYSE: DRE) owns and operates approximately 156 million rentable square feet of industrial assets in 20 major logistics markets.

The company recently increased its full-year guidance for 2020 development starts to a range of $775 million to $850 million from the previous range of $650 million to $800 million. Among recent developments, the company said it executed two leases in speculative development projects and started seven development projects since the end of the third quarter worth $405 million.

Duke Realty said its total development starts for 2020 are at 5.8 million square feet, with a projected $780 million in total project costs and an initial pre-leasing level of 64%.

The company is structured as a real estate investment trust and pays a 2.66% distribution. BofA Securities has set a $49 price target. The $44.57 consensus target is lower but compares with Monday’s final print of $38.34 for Duke Realty stock.

NRG

This stock has made a nice run off the lows but may hold solid upside for aggressive investors. NRG Energy Inc. (NYSE: NRG) is an integrated independent power producer that owns and operates 27 gigawatts (GW) of conventional and renewable generating capacity in the United States and serves 3 million retail customers in Texas and the Northeast.

NRG derives revenue from the sale of electricity in the wholesale and retail markets and the sale of capacity. The company also owns a 64.5% interest in NRG Yield, a publicly traded, dividend growth-oriented company that owns 5 GW of long-term contracted renewable assets.

Last Summer, NRG bought Centrica’s North American energy business in a $3.6 billion deal that nearly doubled the number of homes and businesses NRG serves across the United States and Canada. The all-cash deal to buy Direct Energy gave NRG 3 million more retail customers and is expected to generate about $740 million in annual adjusted earnings before interest, taxes, depreciation and amortization.

Investors receive a 3.02% dividend. The BofA Securities price target is $40. The posted consensus target is higher at $45.11, and NRG Energy stock closed Monday’s trading at $33.31 per share.

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These five stocks replace AES Corp. (NYSE: AES), Lam Research Corp. (NASDAQ: LRCX) and SBA Communications Corp. (NASDAQ: SBAC), which were removed from the US 1 list, but each is still rated Buy.

Given the huge market move higher over the last year it may be wise to buy partial positions and see if we don’t indeed see a test of the 200-day moving average, or at least a sizable pullback, over the next month or so, especially with fourth-quarter earnings ready to start rolling in this week. That noted, all these stocks are great additions to long-term growth portfolios.

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