BofA Investment Advice: Go Long Women


By Christina Cheddar Berk, CNBC News Editor

NEW YORK (CNBC) -- As consumers come creeping back, Bank of America Merrill Lynch is out with a report touting a new investment theme to get behind: Be "long women."

The firm has developed an entire list of stocks centered around the idea that more women have more money, and the stocks of companies that cater to their needs should benefit from their rising wealth.

It's no secret that during the recent recession men have suffered job losses at a much more severe rate than women. The sectors that were most battered by the downturn were ones that are largely dominated by men, such as manufacturing and construction.
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BofA expects women to keep their lead in the work force, as many of the sectors showing job growth now are those traditionally dominated by women -- think healthcare professions such as nurses and home health aides, for instance.

Women also are earning more bachelor's degrees then men, and the gender wage gap is narrowing.

"In the next 10 years, females aged 30 to 39 are expected to be among the fastest growing demographic groups within the U.S. population," said David Bianco, chief U.S. equity strategist, in a research note. "Consumers in this group are near their peak earning and spending years."

Bianco predicts that since women are expected to earn a larger portion of household income, they will begin to exert even more control over spending for the home than they already have.

Already economic growth is gaining speed, growing 3.2 percent in the final three months of 2010. Consumer spending, which accounts for more than two-thirds of U.S. economic activity, was an engine of that growth, rising 4.4 percent in the fourth quarter.

Consumers also appear to be in a better mood, with the latest read on consumer sentiment showing improvement.

BofA's research note includes a list of stock ideas that fit this long-term thematic idea.

These stocks include a number of retailers that the firm expects to benefit from this new spending power, such as Ann Taylor ( ANN), Express ( EXPR), Coach ( COH), Tiffany ( TIF), Chico's FAS ( CHS) and Macy's ( M), among others.

But it also includes consumer staples companies, based on the idea that cosmetic sales will be on the rise as well as container and packaging companies such as Aptar Group ( ATR) and MeadWestvaco ( MWV), which supply this industry.

Healthcare companies such as as Allgeran ( AGN) -- which makes Botox, breast implants, and Latisse, an eyelash lengthener -- were also included.

Two more suggestions were American Express ( AXP) and Constellation Brands ( STZ).

American Express was included because part of the company's growth strategy is focused on women and "high-end products with reward and travel features designed to appeal to high-income female customers."

Meanwhile, Constellation made the cut because of its extensive product portfolio of wine, a highly fragmented U.S. market, but one which Constellation leads. BofA expects the company could benefit from women drinking more wine.

-- Written by Christina Cheddar Berk of CNBC

CNBC is a world leader in business news, providing real-time financial market coverage and business information.

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