Bank of America Highlights Stocks With Growth Potential for Investors This September

Picking stocks is a lot like picking players for a sports team—you want a mix of strong performers and some with the potential to surprise everyone. Knowing which stocks are heating up can help investors build a winning portfolio.

Why This Matters for Investors

The market is always changing, and some companies are showing signs of big growth. If you invest in the right ones, your money could grow faster than average. But it’s important to look at both the good and the bad sides before jumping in.

The Bull Case: Why Some Stocks Are Getting Attention

• Madison Square Garden Entertainment: This company owns famous sports teams like the New York Knicks and Rangers. Lately, it’s been making more money from concerts and sports events. The company’s profits are growing, and its stock price is up 45% this year. Experts think there’s still room for more growth because of a packed event schedule and better ways to make money from each show.
• Church & Dwight: Known for products like Arm & Hammer, this company is mixing value brands with higher-end products. Analysts say it’s getting better at making money and has a strong history during tough economic times. The stock is up 21% this year, and the company is seeing record margins thanks to new ideas and reshaping its lineup.
• ASML: This company makes machines that help build computer chips. Even though its stock dropped recently, some analysts call it a “buy the dip” opportunity. The company is still growing its profits and is considered best-in-class for earnings growth. Shares have climbed 58% this year, and many experts think it will keep leading in technology.
• Tapestry: The parent company of Coach and Kate Spade is showing steady growth. While the stock may not have a lot more room to rise right now, it’s returning money to shareholders and has strong cash flow.

The Bear Case: Risks and Things to Watch Out For

• Madison Square Garden Entertainment: If people stop going to concerts or games, the company could make less money. Its stock price is already high, so there’s a risk of it dropping if results slow down.
• Church & Dwight: Competition is tough in household products, and if shoppers stop buying premium brands, profits could go down. Changes in the economy might also hurt sales.
• ASML: The company faces tight supply and more rivals. If it can’t keep up with demand or if chipmakers buy less equipment, growth could slow. The stock’s recent drop shows investors are nervous about these risks.
• Tapestry: The luxury market can be sensitive to economic swings. If shoppers cut back, brands like Coach and Kate Spade could see sales fall. Also, the stock is already priced high compared to its earnings.

What the Data Says

Looking at history, companies that innovate and lead in their sectors often outperform. For example, according to Morningstar, top-performing stocks over the last 30 years have delivered average annual returns of more than 20%. But even the best stocks have rough patches, so it’s important to watch for warning signs as well as opportunities.

Investor Takeaway

• Keep an eye on companies with strong brands and growing profits—these often lead to higher stock prices over time.
• Diversify your portfolio by mixing steady performers with a few riskier picks that have high growth potential.
• Don’t chase stocks just because they’ve gone up; look at the reasons behind the growth and whether it can continue.
• Watch for changes in the economy that could hurt sales, especially for companies that depend on consumer spending.
• Do your homework—read up on companies and check what experts and data say before investing.

For the full original report, see CNBC