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GOLDMAN SACHS: These 15 stocks are plunging with the market, but their powerful long-term growth could make them bargains to buy right now

Mar 10, 2020, 21:26 IST
Brendan McDermid/Reuters
  • Goldman Sachs says some of the strongest and steadiest growers in the stock market have plunged during the coronavirus-linked sell-off of the last three weeks.
  • Most of the firm's 15 "rule of 10" stocks - named for their long-term earnings and sales growth projections - have done worse than the S&P 500 recently.
  • The companies could stand out that much more by comparison since Goldman Sachs thinks US companies will report zero earnings growth this year.
  • Visit Business Insider's homepage for more stories.

Where do you look for opportunities after the market's gone haywire? One way is to find the companies with the steadiest and strongest trajectories.

The stock market's current nosedive has hurt almost every company, knocking the S&P 500 down almost 19% from its record high close on February 19, less than three weeks ago. Bond prices have hit record highs and forecasts for stocks and the global economy have turned pessimistic with remarkable speed.

Some of the biggest losers have been companies that David Kostin, the chief US equity strategist for Goldman Sachs, holds in high regard. They fit into an investing "rule of ten" his team developed in 2017, with long-term earnings per share growth of at least 10% a year and sales growth of 10% a year.

Those forecasts would be above-average during typical periods, and they might look even better in 2020 because Goldman Sachs is forecasting no earnings growth for S&P 500 companies this year, a result of the economic slowdown caused by the coronavirus outbreak and measures intended to stop it.

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While a few of them have held up well in the current wave of selling, most have fallen with the market or fared even worse than major indexes. But based on those earnings and growth projections, they could help investors get through the ongoing chaos and help them get back on their feet.

Here are 15 "rule of ten" stocks identified by Kostin. They're ranked based on their performance from the time the S&P 500 peaked on February 19 through Monday's close, as the size of the losses they've taken could be a measure of the opportunity they'll present going forward.

Get the latest Goldman Sachs stock price here.
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