Software stock investing advice for 2020: Bank of America - Business Insider

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Software stock investing advice for 2020: Bank of America - Business Insider
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BANK OF AMERICA: These are the 10 software stocks to buy in 2020 and the trends that will help them rule the market's biggest sector

Bank of America research analyst Kash Rangan says it's time to be more careful about what you buy in one of the highest-flying industries of the day. He's taking a "Market weight" stance on software, saying that while business conditions are strong, investors are likely to find reasons to look at other sectors and away from companies considered momentum stocks.

"We are increasingly selective on the sector given macro economists are calling for a late stage economic cycle with a tilt towards value, and concerns about a tech/trade war," he wrote in a note to clients. "We identify companies that own their franchises and are dominant in their end markets." Another potential source of turbulence is this: He also expects elevated IPO and M&A activity next year, something that would jolt stocks that might be acquired but lead to penalties on acquirers, a trend that played out in 2018 and 2019.

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