Investor concerns about a potential recession led to a sell-off in global markets on Monday, but Goldman Sachs found a way to navigate a hypothetical recession. The S&P 500 and the Dow Jones Industrial Average posted their worst performances in nearly two years on Monday, following Friday’s weaker-than-expected July jobs report. On that day, Japan’s Nikkei 225 Index also experienced its worst trading day since Wall Street’s “Black Monday” in 1987. In the face of these concerns, Goldman Sachs owns a basket of solid growth stocks that can provide a degree of safety amid concerns about a slowdown in the U.S. economy. These names may also perform well as economic policy becomes uncertain. “Investor focus will soon turn to the 2024 U.S. presidential election, which is just three months away,” David Kostin, Goldman Sachs’ chief U.S. equity strategist, wrote in a note on Monday. “Historically, the 2024 U.S. presidential election is just three months away.” See, when economic policy uncertainty rises, stable growth stocks outperform other stocks.” The company’s basket consists of 50 companies in the Russell 1000 Index that have recorded interest, tax, depreciation and amortization over the past 10 years. Pre-profit growth is the most stable. Here are some companies on the list: Among the various industries on the list, the information technology industry has the largest number of companies on the list, with 14, but only 5 of them have experienced growth this year. Technology giant International Business Machines Corporation and cloud security company F5 are two of them, with their share prices rising by more than 14% and about 5% respectively in 2024. The company’s shares rose 9% after the company reported second-quarter profit that beat Wall Street expectations. The companies’ 10-year EBITDA growth variability is also at the higher end of the group, with IBM at 15 percentage points and F5 at 16 percentage points. Where they differ, however, is in their consensus on year-round growth. Specifically, Goldman Sachs noted that F5’s consensus forecast is for 2024 EPS to grow 12%, while IBM’s consensus forecast is for 5% EPS growth. In the consumer discretionary space, Domino’s Pizza is on the list. The company’s 10-year EBITDA growth fluctuation is 7 percentage points. Domino’s also expects full-year earnings per share to grow 10% and revenue to grow 7%. By 2024, the company’s shares will rise about 4%. The CEO also noted that orders are increasing “in our delivery business, in our operations, in every revenue segment.” Communications services stock Sirius XM and healthcare brand Zoetis (the other two names on the list) have underperformed this year. While Zoetis shares are down more than 6% in 2024, Sirius XM’s decline is even greater, with shares down nearly 44% from the same period last year.
