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”.

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.

More reading

• What 2020 has taught us about investing
• Chief analyst expects Australian share market to continue rising, says ASX 200 could approach 6,600 in the weeks ahead
• Leading brokers name 3 ASX 200 shares to buy today
• Flight Centre share price and other ASX 200 travel shares look set to continue rising
• Will ASX 200 shares hit a record high in June?

Motley Fool contributor Brendon Lau owns shares of BlueScope Steel Limited, Macquarie Group Limited, and WorleyParsons Limited. The Motley Fool Australia owns shares of and has recommended Macquarie Group Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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I think Westpac Banking Corp (ASX: WBC) and the rest of the big four banks remain good value despite their strong gains over the last few weeks.

However, not everyone is keen on the banks and other investors may already have enough exposure to the sector.

So, if you’re looking for dividends outside the banking sector, then I would suggest you look at the shares below. Here’s why I would buy them:

BWP Trust (ASX: BWP)

The first ASX dividend share to consider ahead of Westpac and the rest of the big four is BWP. It is a real estate investment trust which leases the majority of its properties to Wesfarmers Ltd (ASX: WES) owned Bunnings Warehouse. As Bunnings is one of the highest quality retailers in the country, I believe it is a great tenant to have. Furthermore, with Wesfarmers also a substantial shareholder in BWP, its interests are firmly aligned with the investment trust. All in all, I believe BWP is well-positioned to deliver solid income and distribution growth over the next decade. At present I estimate that it offers investors a forward 5% yield.

Rural Funds Group (ASX: RFF)

Another property company which I think could be a great alternative to the big four banks is Rural Funds. It has a focus on Australian agricultural assets and owns a portfolio of high quality properties across different industries. These properties are leased by some of the biggest names in the industry such as Treasury Wine Estates Ltd (ASX: TWE) on ultra long leases.  Thanks to these long leases and fixed rental increases, I believe Rural Funds can grow its distribution at a strong rate over the next decade. In FY 2021 the company intends to grow its distribution to 11.28 cents per share. This equates to a 5.6% distribution yield.

Telstra Corporation Ltd (ASX: TLS)

Another dividend share to look at buying is Telstra. I think the telco giant is a great alternative to the big four banks due to its defensive qualities, attractive valuation, and generous yield. Another positive is that a return to growth doesn’t appear to be too far away. This is thanks to the NBN headwinds easing and its sizeable cost cutting and simplification plans. For now, I’m confident that its free cash flows are sufficient to maintain its 16 cents per share dividend for the foreseeable future. This equates to a fully franked 4.9% dividend yield.

More reading

• Two perspectives and a Buy recommendation
• Leading brokers name 3 ASX 200 shares to buy today
• Why Bendigo and Adelaide Bank, BWP, G8 Education, & Westpac are zooming higher
• 3 ASX 200 shares to watch this week
• Can the Wesfarmers share price continue to rise after its market update today?

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended RURALFUNDS STAPLED and Telstra Limited. The Motley Fool Australia owns shares of Wesfarmers Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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As I’ve mentioned here previously, I like to keep an eye on substantial shareholder notices.

This is because these notices give you an idea of which shares large investors, asset managers, and investment funds are buying or selling.

Two notices that have caught my eye today are summarised below. Here’s what these fund managers have been buying:

Corporate Travel Management Ltd (ASX: CTD)

A notice of initial substantial holder reveals that ECP Asset Management has been buying this corporate travel specialist’s shares. ECP is an active investment company which has beaten the market since 2010. It likes to invest with a long term approach in companies with durable competitive advantages and a sustainable business model.

According to the notice, ECP was buying shares last week. These latest purchases pushed its holding to a total of 5,611,329 shares. This represents a 5.15% stake in Corporate Travel Management. With the company’s shares down 42% from their 52-week high (even after a strong gain today), it appears as though this fund manager sees a lot of value in them.

Infomedia Limited (ASX: IFM)

A notice of change of interests of substantial holder shows that WAM Capital Limited (ASX: WAM) has been increasing its stake in this automotive software company. WAM is a leading fund manager founded by Geoff Wilson AO.

According to the notice, WAM has been on a buying spree since the start of May and has grown its position by 7.2 million shares since its last notice at the end of April. This means WAM now owns a total of 24,034,732 shares, which represents a 6.42% stake in Infomedia. When the fund manager first started to top up its holding, Infomedia’s shares were down 37% from their high. This appears to have been a level which WAM felt was undervalued. But given that it was still buying shares as recently as last week, it must still see value in them today.

More reading

• Flight Centre share price and other ASX 200 travel shares look set to continue rising
• Will the Qantas share price crash back to Earth?
• We’re in recession. What does that mean for investors?
• ASX 200 rises 0.8%, travel shares fly higher
• This ASX 200 stock is well placed to beat earnings expectations

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Infomedia. The Motley Fool Australia owns shares of and has recommended Corporate Travel Management Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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