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Bank of America Merrill Lynch’s top 5 stocks

The S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) is currently sitting near a five-year high following strong rallies from some of Australia’s largest companies. Whilst many investors are remaining on the sidelines waiting for a more attractive time to buy stocks, analysts from Bank of America Merrill Lynch (BoAML) believe there is still plenty of value to be found.

In fact, the analysts compiled stocks across five different industries that they consider to be “super sectors”, which included consumer, basic materials, interest rate-sensitive, resources and energy as well as transport and utilities. Here are the companies they believe will be at the forefront of these sectors.

Consumer: BoAML’s favourite consumer stock is none other than blood products maker CSL (ASX: CSL). The company is currently priced at $67.02 and maintains a 12-month target of $71.80. The Australian Financial Review quoted BoAML analyst Matthew Prior as saying “CSL has spent the past three years amassing market share faster than anticipated” and with strong cash generation and a strong balance sheet, the company should be able to pursue further growth opportunities.

Interest rate-sensitive: Analysts have rated National Australia Bank (ASX: NAB) as a buy at its current price of $33.63 and given it a 12-month price target of $40.30. Expected shareholder returns over the year could exceed 18%. While the bank is making good progress on costs, investors with a long-term focus should be cautious. Returns from the banks might be good in the short-term but in the long-term, it is difficult to see how they will deliver market-beating returns.

Resource and energy: Santos (ASX: STO) is expected to climb to $16.96 from today’s value of $14.72 and should deliver total shareholder returns of 17% over the coming 12 months. With liquefied natural gas (LNG) set to surge, according to The Sydney Morning Herald, Santos could certainly be a good bet for the long term.

Basic materials: Currently priced at $4.98 per share, Bluescope Steel (ASX: BSL) maintains a 12-month target of $5.25 with shareholder returns expected to be around 10% over the next year. As the Australian dollar inevitably weakens and domestic demand improves, Bluescope could be a good acquisition at today’s price.

Utility and transport: Origin Energy (ASX: ORG) was BoAML’s favourite from the utility and transport sector with a 12-month target of $16.05 from its current $14.30 level. BoAML analyst Simon Chan said, “It is the best-placed gas retailer in the national market. It has locked in enough gas to supply all its customers at $6 per gigajoule through to the early 2020s… Margins should increase from financial year 2015.”

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Motley Fool contributor Ryan Newman does not own shares in any of the companies mentioned.