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Bank of America names some top contrarian stocks to buy right now

Published Tue, Feb 8 20226:34 PM EST

Bank of America analysts have named of number of out-of-consensus stock ideas, which they think score well on ESG (environmental, social and governance) factors and are set to outperform. Market participants are increasingly seeking to invest in stocks based on environmental, social and governance factors — also known as ESG or sustainable investing. U.S. sustainable funds attracted $34 billion of inflows in 2021, according to data from Morningstar , while Bank of America says that assets under management in global ESG funds are growing three times as quickly as their non-ESG peers. Yet, it is not always easy to determine which are the best sustainable investments. Bank of America has devised a "ESGMeter" — a metric that identifies companies with "superior financial stability" based on ESG attributes — in an effort to cut through the noise, analyst Xavier Le Mene explained in a note on Jan. 25. Contrarian stock picks Le Mene and colleagues screened for stocks that score highly on the ESGMeter, are liked by the bank — but not other analysts. "We identify 25 names where the ESGMeter is high, BofA analyst have a strong conviction (Buy) but where the consensus is either Neutral or Sell/Underperform," Le Mene explained. One such stock is British engineering firm Spirax- Sarco , which the bank said is the world leader in the control and efficient use of steam. This is at the core of many industrial processes and a vital component of its customers' ESG strategies, Le Mene said. Norwegian energy firm Equinor also makes the list. The company has been building a renewable portfolio focused on offshore wind and plays a leading role in the development of floating offshore wind technology, Le Mene said. It could potentially dominate this key technology of the energy transition give