Goldman Sachs pinpointed these 15 must-own stocks they say are best positioned to weather an inevitable coronavirus recession
- With a growing number of investment institutions and pundits calling for a recession in 2020, David Kostin - chief US equity strategist at Goldman Sachs - thinks investors should consider betting on stocks with a long history of reliable earnings.
- Kostin provides investors with a comprehensive list of stocks with minimal variability in earnings over the last decade.
- In total, Goldman expects a 41% peak-to-trough decline in the S&P 500, which would imply another 16% move lower from March 16 in the next three months.
- Click here for more BI Prime stories.
In times of turmoil, investors look toward stability.
After all, with many forecasts painting an abysmal outlook for the global economy, and new cases of COVID-19 consistently cropping up, the last thing anyone wants to hold (or buy more of) is a subpar business with sporadic earnings growth. Especially in what appears to be an imminent recession.
Although stocks have already been walloped in 2020, David Kostin - chief US equity strategist at Goldman Sachs - thinks investors have more pain to endure before the year is through.
Below is a chart of Goldman's forecasted path for the S&P 500 in 2020.
Below is a chart of Goldman's projected peak-to-trough drawdown in the S&P 500 for 2020 juxtaposed against previous recessions.
Kostin thinks that owning companies with little growth variability in earnings is crucial during these time periods. Their robust history of stable earnings should make these issues much more likely to weather a recession.
That said, Kostin nailed-down the stocks with the most stable 10-year EBITDA growth that are poised to retain more earnings stability than the overall market.
Listed below are 15 stocks, ranked in decreasing order of 10-year EBITDA growth variability.
Get the latest Goldman Sachs stock price here.