Wells Fargo says investors need to be selective, spotlights META, GOOG, and NFLX

Wells Fargo on Friday argued that investors should be buying stocks and not the stock market, as being selective is key right now.

Specifically, Wells Fargo’s equity research team highlighted that they remain overweight on the Communication Services sector, as the segment is +20.1% year-to-date and +30% over a 1-year period.

“Our year-end SPX target remains 5535, implying 4% upside from here. It is hard for us to pound the table and advise buying the dip now as this week’s events, traditional pre-Fed price action, and the lack of catalysts keeps us cautious,” Wells Fargo’s Christopher Harvey said on Friday in an investor note.

The financial institution went on to add: “For example, we believe the 9% pullback in the overweight-rated Comm Services sector is an attractive entry point; notably, (NASDAQ:META), (NASDAQ:GOOG), and (NASDAQ:NFLX) show up on our momentum screen.”

Year-to-date META is +43.9%, GOOG is +16.3%, and NFLX is +29.5%.

Furthermore, for investors that share a similar mindset with Wells Fargo and are looking for a diversified approach to Communication Services, they can always look towards exchange-traded funds that track the sector. Some popular funds worth noting are as follows:

Communication Services ETFs: (XLC), (VOX), (IYZ), (RSPC), and (XTL).