GOLDMAN SACHS: These 14 stocks offer explosive profit growth that will help fight mounting selling pressure
- As volatility whipsaws major stock indexes, it's becoming increasingly important to identify companies built to withstand turbulence.
- Goldman Sachs has singled out 14 companies that share strength in the same key fundamental trait.
Stock market volatility is back in a big way, and with it comes massive opportunity for investors willing to do their homework.
That last part is a major qualification. After all, the benchmark S&P 500 trades inversely to the Cboe Volatility Index (VIX) - frequently described as the stock market's fear gauge - roughly 80% of the time.
Luckily, Goldman Sachs is here to help you make the types of informed stock-picking decisions that outperform during turbulent periods. And in this case, that means selecting companies expected to see strong growth in a measure called return on equity (ROE), otherwise defined as the amount of corporate net income returned as a percentage of shareholders' equity.
By Goldman's forecast, ROE is set to spike to 17.6% this year, which would be the highest level since 2007 - and it has the new tax law to thank. And while the firm acknowledges that US stock valuations are historically high, it argues that the surging ROE will keep them in check and prevent pricing measures from getting overextended.
Without further ado, here are 14 stocks across seven industries that Goldman says will generate the highest ROE growth this year: