Go ‘Long on Women’ as Spending Recovers, Bank of America Says

Investors should consider a “long women” investment plan that focuses on female-oriented apparel, cosmetic and consumer-finance stocks, as women become bigger spenders, according to Bank of America Merrill Lynch.

Women will recover faster from the recession, as the female unemployment rate at 8.9 percent is almost two percentage points below the male rate, and women are “best positioned” in job growth areas such as health care, according to a note dated Jan. 26 from David Bianco, chief U.S. equity strategist at the Charlotte, North Carolina-based firm. One of the fastest-growing demographic groups is women in their 30s, he said.

“While women already control a majority of household spending on items such as apparel and accessories, we think stronger purchasing power relative to men additionally bodes well for spending on categories such as vacations, cosmetic procedures, or home furnishings,” Bianco wrote. “Single working females should also spend more on themselves, especially as many wait longer to marry.”

The U.S. economy will grow 3.1 percent this year as it continues to recover from the worst recession since World War II, according to the average of 71 forecasts compiled by Bloomberg. The Federal Reserve and the Obama administration have implemented policies and stimulus plans to boost the world’s largest economy and drive down the total U.S. unemployment rate, which at 9.4 percent in December remains near the 26-year high reached in October 2009.

Bianco recommends consumer companies that focus on apparel, cosmetics and beauty products, material companies that provide packaging for fragrances, health-care stocks for “facial and breast aesthetics,” as well as consumer finance companies with travel features. There are 26 companies that fit the “long women” theme, ranging from American Express Co. to Bed Bath & Beyond Inc. to Tiffany & Co., he said.

Below is Bianco’s list of “long-women” stocks:

Allergan Inc. (AGN US)
Medicis Pharmaceutical Corp. (MRX US)
AptarGroup Inc. (ATR US)
MeadWestvaco Corp. (MWV US)
American Express Co. (AXP US)
Constellation Brands Inc. (STZ US)
Liberty Media Corp.’s Interactive Series A (LINTA US)
Walt Disney Co. (DIS US)
Estee Lauder Cos. (EL US)
AnnTaylor Stores Corp. (ANN US)
Express Inc. (EXPR US)
Coach Inc. (COH US)
Tiffany & Co. (TIF US)
Urban Outfitters Inc. (URBN US)
Gap Inc. (GPS US)
Chico’s FAS Inc. (CHS US)
Lululemon Athletica Inc. (LULU US)
Limited Brands Inc. (LTD US)
J.C. Penney Co. (JCP US)
Macy’s Inc. (M US)
Kohl’s Corp. (KSS US)
Nordstrom Inc. (JWN US)
Saks Inc. (SKS US)
Bed Bath & Beyond Inc. (BBBY US)
Williams-Sonoma Inc. (WSM US)
Pier 1 Imports Inc. (PIR US)


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