21 companies that give stock pickers their best shot at crushing the market, according to Goldman Sachs

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FILE PHOTO: Traders work on the floor of the New York Stock Exchange, (NYSE) in New York, U.S., February 6, 2018. REUTERS/Brendan McDermidThomson ReutersTraders work on the floor of the NYSE in New York

When stocks trade too similarly, it's tougher for stock pickers to profit from unique opportunities.

The average three-month stock correlation on the S&P 500, a gauge of how uniformly stocks on the index trade, jumped from 9% in January to 52% last week. That was the largest and fastest increase outside of 1987, according to David Kostin, Goldman Sachs' chief US equity strategist.

But there's some good news for stock pickers: Kostin expects correlations to fall, as regulation on tech companies and other policy risks create more individualized opportunities.

"We expect correlations for these stocks would likely revert to historical averages and present potential buying opportunities given their underperformance since March," Kostin said.

The list below highlights 21 buy-rated stocks that Kostin says are more likely to have heightened responses to individual news and offer the best opportunities for stock pickers to beat their benchmarks.

"Consumer Discretionary and Health Care currently offer the best stock-picking opportunities," Kostin said.

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MGM Resorts International

MGM Resorts International

Ticker: MGM

Sector: Consumer Discretionary

Market cap: $19 billion

Upside to Goldman Sachs' target: 28%

Amazon

Amazon

Ticker: AMZN

Sector: Consumer Discretionary

Market cap: $691 billion

Upside to Goldman Sachs' target: 28%

Nucor Corp.

Nucor Corp.

Ticker: NUE

Sector: Materials

Market cap: $19 billion

Upside to Goldman Sachs' target: 28%

Freeport-McMoRan

Freeport-McMoRan

Ticker: FCX

Sector: Materials

Market cap: $26 billion

Upside to Goldman Sachs' target: 28%

Mylan

Mylan

Ticker: MYL

Sector: Healthcare

Market cap: $21 billion

Upside to Goldman Sachs' target: 29%

Micron Technology

Micron Technology

Ticker: MU

Sector: Information Technology

Market cap: $58 billion

Upside to Goldman Sachs' target: 29%

AutoZone

AutoZone

Ticker: AZO

Sector: Consumer Discretionary

Market cap: $17 billion

Upside to Goldman Sachs' target: 35%

Take-Two Interactive Software

Take-Two Interactive Software

Ticker: TTWO

Sector: Consumer Discretionary

Market cap: $11 billion

Upside to Goldman Sachs' target: 37%

Tyson Foods

Tyson Foods

Ticker: TSN

Sector: Consumer Staples

Market cap: $21 billion

Upside to Goldman Sachs' target: 37%

Broadcom

Broadcom

Ticker: AVGO

Sector: Information Technology

Market cap: $99 billion

Upside to Goldman Sachs' target: 40%

Molson Coors Brewing

Molson Coors Brewing

Ticker: TAP

Sector: Consumer Staples

Market cap: $16 billion

Upside to Goldman Sachs' target: 41%

Vulcan Materials

Vulcan Materials

Ticker: VMC

Sector: Materials

Market cap: $15 billion

Upside to Goldman Sachs' target: 43%

AbbVie

AbbVie

Ticker: ABBV

Sector: Healthcare

Market cap: $149 billion

Upside to Goldman Sachs' target: 44%

Alexion Pharmaceuticals

Alexion Pharmaceuticals

Ticker: ALXN

Sector: Healthcare

Market cap: $25 billion

Upside to Goldman Sachs' target: 44%

Noble Energy

Noble Energy

Ticker: NBL

Sector: Energy

Market cap: $15 billion

Upside to Goldman Sachs' target: 45%

Williams Companies

Williams Companies

Ticker: WMB

Sector: Energy

Market cap: $21 billion

Upside to Goldman Sachs' target: 46%

Incyte Corp.

Incyte Corp.

Ticker: INCY

Sector: Healthcare

Market cap: $14 billion

Upside to Goldman Sachs' target: 46%

Biogen

Biogen

Ticker: BIIB

Sector: Healthcare

Market cap: $56 billion

Upside to Goldman Sachs' target: 53%

Cabot Oil & Gas

Cabot Oil & Gas

Ticker: CBT

Sector: Energy

Market cap: $11 billion

Upside to Goldman Sachs' target: 60%

Newfield Exploration

Newfield Exploration

Ticker: NFX

Sector: Energy

Market cap: $5 billion

Upside to Goldman Sachs' target: 77%

Dish Network

Dish Network

Ticker: DISH

Sector: Consumer Discretionary

Market cap: $9 billion

Upside to Goldman Sachs' target: 80%

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