BofA Strategist: Ditch the Index, Buy These 'Boring' Stocks

Savita Subramanian, Bank of America Securities' head of US equity and quantitative strategy, told CNBC this week that corporate earnings are "gangbusters" and the trade investors want is the one no one is memeing about. She argues that cyclicals are cheap, capex is accelerating, and the boring stuff is the way to go.

Analyst's Rationale

Subramanian sees cyclical stocks like Caterpillar (CAT), Applied Materials (AMAT), and Exxon Mobil (XOM) as undervalued. With capital expenditure accelerating across the economy, these companies benefit from increased investment in infrastructure, manufacturing, and energy. Their earnings are strong, making them attractive compared to overvalued growth stocks.

Context

The recommendation comes as market attention is focused on big tech and AI stocks. However, Subramanian believes that boring stocks—those not hyped on social media—offer better opportunities. These stocks have performed well recently but have not matched the enthusiasm for trendy names.

What to Make of It

Subramanian's call suggests a potential shift toward value and stability. Investors should monitor capex trends and cyclical earnings, but the final decision depends on individual investment goals and risk tolerance.