/Stock picks to buy, 15 companies built for coronavirus recession: GS – Business Insider

Stock picks to buy, 15 companies built for coronavirus recession: GS – Business Insider


  • With a growing number of investment institutions and pundits predicting a recession in 2020, David Kostin, the chief US equity strategist at Goldman Sachs, thinks investors should consider betting on stocks with a long history of reliable earnings.
  • Kostin provided investors with a comprehensive list of stocks with minimal variability in earnings over the past decade.
  • In total, Goldman expects a 41% peak-to-trough decline in the S&P 500, which implies another 16% move lower from March 16 in the next three months.
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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

Though stocks have already been walloped in 2020, David Kostin, the 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 forecast path for the S&P 500 in 2020.

Goldman Sachs Global Investment Research



Goldman Sachs Global Investment Research


When the dust finally settles, Kostin thinks a 41% move in the S&P 500 from peak to trough is likely before it undergoes what appears to be a V-shaped recovery.

Below is a chart of Goldman’s projected peak-to-trough drawdown in the S&P 500 for 2020 compared with previous recessions.

Goldman Sachs Global Investment Research



Goldman Sachs Global Investment Research


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 growth in earnings before interest, taxes, depreciation, and amortization 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.

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