Bank of America names its top stock picks for the fourth quarter

Published Mon, Oct 4 20211:56 PM EDTUpdated Mon, Oct 4 20214:09 PM EDT

Bank of America kicked off the fourth quarter with fresh stock ideas. The Wall Street firm publishes a list of ten high-conviction, short-term stock recommendations for each quarter. The latest list was published Friday. The S & P 500 closed the third quarter slightly higher, but saw gains weighed down by a negative September performance as stocks battled seasonal weakness, Federal Reserve tapering fears and global growth concerns. "[S & P 500] upside is getting tricky, so we recommend being selective," Bank of America's Anthony Cassamassino said in a note. This quarter's group includes eight buy recommendations. Take a look at five of those names: Bank of America is bullish on General Electric as the aerospace sector recovers. "The delta variant of Covid-19 drove an August dip in commercial air flights. However, high-frequency data from the BofA Global Aerospace team shows a recovery in September. With a flight recovery already underway, we expect improving sentiment in 4Q," analyst Andrew Obin said. The firm also noted GE's operation improvements should boost profit margins. Ride-sharing and food delivery platform Uber nabs a spot on Bank of America's list. The firm believes Uber's labor shortages will improve as pandemic unemployment stimulus trickles off. "This will open up driver supply in the U.S., where a driver shortage had led to fewer trips and take rates, with driver earnings up over 20% [year over year]," analyst Justin Post said. Bank of America will be keeping an eye on Uber breaking even and reaching profitability, projected in the third quarter. The bank also likes Extra Space Storage for the fourth quarter as a defensive play. Defensive stocks are shares that tend to be stable regardless of how the overall market performs. "We believe EXR's competitive advantages are an experienced management team, the largest third-party management platform, a proprietary revenue management system and high quality demographics around its stores," Bank of America's Jeffrey Spector said. Bank of America predicts an improving economy and strong consumer will boost Extra Space Storage's performance. Other names on Bank of America's list of top ideas include energy company APA and media giant Fox Corp .

A man checks his smartphone while standing among illuminated screens bearing the Uber logo.

Chris Ratcliffe | Bloomberg | Getty Images

Bank of America kicked off the fourth quarter with fresh stock ideas.