GOLDMAN SACHS: Buy these 35 stocks that are unruffled by GameStop mania and set to rally as the economic recovery gains speed

  • Blue-chip stocks fell last week as hedge funds partially exited them to help cover their short positions.
  • Reddit-driven trading and short squeezes appear to be continuing this week. 
  • Goldman Sachs recommends 35 cyclical stocks that have avoided the mania.
  • Visit Business Insider’s homepage for more stories.

Investors piled into heavily shorted stocks last week at flabbergasting rates. 

The trading volume of shares of GameStop, for example, topped behemoths like Apple, Microsoft, and Amazon on January 26.

Because hedge funds were forced to cover short positions in so-called meme stocks including GameStop, they also had to cut their most preferred positions in the market giants mentioned above, among others, causing those prices to fall.

Meanwhile, other stocks missed the trading storm altogether, and actually saw less trading on a relative basis, as investors paid less attention to them.

For investors not wanting to get caught up in the Reddit-driven trading as the squeezes continue this week, Goldman Sachs has released a list of stocks that saw “below-average surges” in trading last week, but that also have above-average revenue growth and positive year-to-date earnings or sales revisions, and are set for gains as the economy continues to recover.

“Investors wishing to sidestep the positioning cross-currents should focus on cyclical stocks that should benefit from ongoing economic acceleration and have not been ensnared in this week’s forced de-grossing trading activity,” the bank’s US Chief Equity Strategist David Kostin said in a January 29 note.

Kostin said that the economic outlook looks favorable, considering ongoing vaccinations and healthy fiscal and monetary stimulus efforts.

“From a corporate perspective, 71% of the 184 S&P 500 firms reporting 4Q results so far have beaten earnings by more than a standard deviation of analyst estimates, on pace for the highest rate on record,” Kostin said.

This makes for a prime environment for cyclical assets, he said, like the 35 stocks below, which are listed in alphabetical order.

1. Air Products and Chemicals

Ticker: APD

Sector: Chemicals

Market Cap: $61 billion

Volume in week ending Jan. 29 vs. three-month average: -21%

Consensus 2021 EPS growth: 11%

Source: Goldman Sachs

2. Allstate Corporation

Ticker: ALL

Sector: Insurance

Market Cap: $33 billion

Volume in week ending Jan. 29 vs. three-month average: +4%

Consensus 2021 EPS growth: -2%

Source: Goldman Sachs

3. Ameriprise Financial

Ticker: AMP

Sector: Capital Markets

Market Cap: $24 billion

Volume in week ending Jan. 29 vs. three-month average: +5%

Consensus 2021 EPS growth: 38%

Source: Goldman Sachs

4. Applied Materials Inc.

Ticker: AMAT

Sector: Semiconductors and Semiconductor Equipment

Market Cap: $92 billion

Volume in week ending Jan. 29 vs. three-month average: +7%

Consensus 2021 EPS growth: 22%

Source: Goldman Sachs

5. Arista Networks

Ticker: ANET

Sector: Communications Equipment

Market Cap: $23 billion

Volume in week ending Jan. 29 vs. three-month average: +8%

Consensus 2021 EPS growth: 11%

Source: Goldman Sachs

6. Ball Corporation

Ticker: BLL

Sector: Containers and Packaging

Market Cap: $29 billion

Volume in week ending Jan. 29 vs. three-month average: +1%

Consensus 2021 EPS growth: 14%

Source: Goldman Sachs

7. Broadcom

Ticker: AVGO

Sector: Semiconductors and Semiconductor Equipment

Market Cap: $183 billion

Volume in week ending Jan. 29 vs. three-month average: -4%

Consensus 2021 EPS growth: 18%

Source: Goldman Sachs

8. Caterpillar

Ticker: CAT

Sector: Machinery

Market Cap: $100 billion

Volume in week ending Jan. 29 vs. three-month average: +10%

Consensus 2021 EPS growth: 40%

Source: Goldman Sachs

9. CF Industries Holdings

Ticker: CF

Sector: Chemicals

Market Cap: $9 billion

Volume in week ending Jan. 29 vs. three-month average: +6%

Consensus 2021 EPS growth: 30%

Source: Goldman Sachs

10. Charles Schwab

Ticker: SCHW

Sector: Capital Markets

Market Cap: $97 billion

Volume in week ending Jan. 29 vs. three-month average: -4%

Consensus 2021 EPS growth: 10%

Source: Goldman Sachs

11. Chevron

Ticker: CVX

Sector: Oil Gas & Consumable Fuels

Market Cap: $171 billion

Volume in week ending Jan. 29 vs. three-month average: -23%

Consensus 2021 EPS growth: N/A

Source: Goldman Sachs

12. ConocoPhillips

Ticker: COP

Sector: Oil Gas & Consumable Fuels

Market Cap: $56 billion

Volume in week ending Jan. 29 vs. three-month average: -27%

Consensus 2021 EPS growth: N/A

Source: Goldman Sachs

13. Cummins

Ticker: CMI

Sector: Machinery

Market Cap: $36 billion

Volume in week ending Jan. 29 vs. three-month average: -3%

Consensus 2021 EPS growth: 24%

Source: Goldman Sachs

14. Deere & Company

Ticker: DE

Sector: Machinery

Market Cap: $92 billion

Volume in week ending Jan. 29 vs. three-month average: -6%

Consensus 2021 EPS growth: 52%

Source: Goldman Sachs

15. Diamondback Energy

Ticker: FANG 

Sector: Oil Gas & Consumable Fuels

Market Cap: $10 billion

Volume in week ending Jan. 29 vs. three-month average: -15%

Consensus 2021 EPS growth: 74%

Source: Goldman Sachs

 

16. EOG Resources

Ticker: EOG

Sector: Oil Gas & Consumable Fuels

Market Cap: $31 billion

Volume in week ending Jan. 29 vs. three-month average: +5%

Consensus 2021 EPS growth: 183%

Source: Goldman Sachs

17. First Republic Bank

Ticker: FRC

Sector: Banks

Market Cap: $25 billion

Volume in week ending Jan. 29 vs. three-month average: -18%

Consensus 2021 EPS growth: 13%

Source: Goldman Sachs

18. Fortune Brands Home & Security

Ticker: FBHS

Sector: Building Products

Market Cap: $12 billion

Volume in week ending Jan. 29 vs. three-month average: -15%

Consensus 2021 EPS growth: 16%

Source: Goldman Sachs

19. Garmin

Ticker: GRMN

Sector: Household Durables

Market Cap: $22 billion

Volume in week ending Jan. 29 vs. three-month average: -26%

Consensus 2021 EPS growth: 6%

Source: Goldman Sachs

20. Hasbro

Ticker: HAS

Sector: Leisure Products

Market Cap: $13 billion

Volume in week ending Jan. 29 vs. three-month average: +10%

Consensus 2021 EPS growth: 26%

Source: Goldman Sachs

21. IDEX Corporation

Ticker: IEX

Sector: Machinery

Market Cap: $14 billion

Volume in week ending Jan. 29 vs. three-month average: -10%

Consensus 2021 EPS growth: 11%

Source: Goldman Sachs

22. Illinois Tool Works

Ticker:ITW

Sector: Machinery

Market Cap: $62 billion

Volume in week ending Jan. 29 vs. three-month average: -5%

Consensus 2021 EPS growth: 20%

Source: Goldman Sachs

23. Ingersoll Rand

Ticker: IR

Sector: Machinery

Market Cap: $18 billion

Volume in week ending Jan. 29 vs. three-month average: -3%

Consensus 2021 EPS growth: 27%

Source: Goldman Sachs

24. Intercontinental Exchange

Ticker: ICE

Sector: Capital Markets

Market Cap: $63 billion

Volume in week ending Jan. 29 vs. three-month average: -5%

Consensus 2021 EPS growth: 7%

Source: Goldman Sachs

25. Invesco

Ticker: ICE

Sector: Capital Markets

Market Cap: $63 billion

Volume in week ending Jan. 29 vs. three-month average: -5%

Consensus 2021 EPS growth: 7%

Source: Goldman Sachs

26. J.B. Hunt Transport Services

Ticker: JBHT

Sector: Road and Rail

Market Cap: $14 billion

Volume in week ending Jan. 29 vs. three-month average: -10% 

Consensus 2021 EPS growth: 22%

Source: Goldman Sachs

27. LyondellBasell Industries NV

Ticker: LYB

Sector: Chemicals

Market Cap: $29 billion

Volume in week ending Jan. 29 vs. three-month average: -10%

Consensus 2021 EPS growth: 64%

Source: Goldman Sachs

28. Mosaic Company

Ticker: MOS

Sector: Chemicals

Market Cap: $10 billion

Volume in week ending Jan. 29 vs. three-month average: -13%

Consensus 2021 EPS growth: 248%

Source: Goldman Sachs

29. Norfolk Southern Corporation

Ticker: NSC

Sector: Road and Rail

Market Cap: $61 billion

Volume in week ending Jan. 29 vs. three-month average: +8%

Consensus 2021 EPS growth: 22%

Source: Goldman Sachs

30. Old Dominion Freight Line

Ticker: ODFL

Sector: Road and Rail

Market Cap: $23 billion

Volume in week ending Jan. 29 vs. three-month average: -1%

Consensus 2021 EPS growth: 23%

Source: Goldman Sachs

31. Qorvo

Ticker: QRVO

Sector: Semiconductors and Semiconductor Equipment

Market Cap: $19 billion

Volume in week ending Jan. 29 vs. three-month average: +7%

Consensus 2021 EPS growth: 13%

Source: Goldman Sachs

32. Ralph Lauren Corporation Class A

Ticker: RL

Sector: Textiles Apparel & Luxury Goods

Market Cap: $8 billion

Volume in week ending Jan. 29 vs. three-month average: -22%

Consensus 2021 EPS growth: 325%

Source: Goldman Sachs

33. Ross Stores

Ticker: ROST

Sector: Specialty Retail

Market Cap: $41 billion

Volume in week ending Jan. 29 vs. three-month average: -7%

Consensus 2021 EPS growth: 278%

Source: Goldman Sachs

34. Valero Energy

Ticker: VLO

Sector: Oil Gas & Consumable Fuels

Market Cap: $24 billion

Volume in week ending Jan. 29 vs. three-month average: -20%

Consensus 2021 EPS growth: N/A

Source: Goldman Sachs

35. Zebra Technologies Corporation Class A

Ticker: ZBRA

Sector: Electronic Equipment Instruments & Components

Market Cap: $21 billion

Volume in week ending Jan. 29 vs. three-month average: -35%

Consensus 2021 EPS growth: 19%

Source: Goldman Sachs

Get the latest Goldman Sachs stock price here.

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