The market jumped to a three-month high on a quicker than expected recovery from the COVID-19 pandemic.
The S&P/ASX 200 Index (Index:^AXJO) jumped 2.4% to 6,145 points as we head into the close as a sense of FOMO gripped the market.
I don't subscribe to using the fear of missing out as an investment strategy and I think investors will need to be more discerning about stocks to buy.
While some stocks look like they have run ahead of fundamentals, there are a handful that's only just been upgraded by brokers to "buy".
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This stock's a steel
One ASX stock that just got bumped up to "buy" by Goldman Sachs is BlueScope Steel Limited (ASX: BSL).
This probably explains the 3.8% jump in the BlueScope share price to $12.84 at the time of writing.
"Steel spreads in both Asia and North America have bounced off floor levels, and we expect improvement over the coming months and a return to levels more consistent with more balanced supply/demand environments," said the broker.
"This is to be supported by positive reversion of volumes across the core markets, in particular in Australia where our channel checks suggest that demand has been a lot more supportive than previously expected.
What's more, Goldman thinks the good times will roll on for the next 12-months thanks to additional government stimulus.
The broker lifted its price target on BlueScope to $14.95 from $10.25 a share.
Right kind of exposure
Another ASX stock that is outperforming today is the Worley Ltd (ASX: WOR) share price.
Shares in the oil and gas engineering group surged 14.3% to $10.63 to become the second top performer on the ASX 200 in late afternoon trade.
The stock was underperforming due to the slump in the oil price but Credit Suisse believes its oversold and upgraded it to "outperform" from "neutral".
The broker also pointed out that Worley is more exposed to operational projects than the more volatile capital projects.
However, Worley's big price gain today may limit further upside as Credit Suisse's 12-month price target on the stock is $10.50 a share.
Good medicine
Defensive stocks like healthcare may have fallen out of favour in the rebounding bull market, but the Healius Ltd (ASX: HLS) share price is bucking the trend.
Shares in the medical facilities group rallied 3.2% to $2.62 after Macquarie Group Ltd (ASX: MQG) lifted its rating on the stock to "outpeform" from "neutral".
While the coronavirus shutdown led to a drop in face-to-face appointments at Healius' general practitioners (GP) offices, the broker said this is more than offset by telehealth services.
Further, comments from diagnostic services group Capitol Health Ltd (ASX: CAJ) about increase demand for its services from GP referrals support this upbeat prognosis.
Macquarie's 12-month price target on the stock is $3 a share.
