Big tech stocks have been a hot topic over the past year, with investors piling into artificial intelligence paragon Nvidia and other so-called “Big Seven” stocks: Alphabet, Amazon, Apple, Meta, Microsoft and Tesla. But this intense focus on a handful of stocks has led one portfolio manager to urge investors to diversify and list two stocks that he thinks look particularly attractive. “I would say that in our view this concentration is troubling and worthy of concern. We did tell [clients] “We do think broader diversification in the market is very important,” Aaron Dunn, portfolio manager of Morgan Stanley’s U.S. Value Fund, told CNBC’s “Signpost Asia” on Friday. “There’s a lot of opportunity,” Dunn said, noting that BJ’s Wholesale Club, a membership chain that lets paying members save money when buying stock in bulk, is one of two he likes on Dunn’s list. “Its balance sheet is”. He added that the company has achieved strong returns on capital and has “pretty good” free cash flow. “They also have a huge digital footprint…as opposed to their larger counterparts in the U.S., they have the ability to expand their footprint on a store basis,” he said. “All of that fits us. It helps consumers. We don’t think you’re going to get a big drop in a stock like this because consumers are saving money. The membership services company, which includes Costco Wholesale and Walmart-owned Sam’s Club, Up about 32.7% year to date and nearly 41% over the past 12 months, 11 have a hold rating and one has a sell rating, which implies an average price target of $86.46. Potential downside for Healthcare Services and Services is about 2.2%, as of April 30. Thermo Fisher is another favorite of Dunn’s, which he views as an industry leader and “supermarket of tools and analytics.” The company accounts for 3.35% of its U.S. Value Fund. [and have] A powerful M&A growth strategy. During the COVID-19 pandemic, the company invested heavily in biotech and pharmaceutical companies. Therefore, we are growing and spinning above the trend. Headwind” this industry. In fact, given this pending situation, these stocks haven’t seen any movement in several years,” Dunn said. “We believe [Thermo Fisher is] Over time, we’re really poised to benefit from that. business, we believe it is undervalued.” Thermo Fisher’s shares are up about 9.5% year to date and 12.8% over the past 12 months. Of the 28 analysts covering the stock, 20 have a buy or overweight rating, and the average price is $627.64, which gives it an 8% upside potential, according to FactSet data.
