Goldman Sachs' value picks
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Hey Insiders, Today we will look at the recently released Goldman Sachs Value Stock Picks. Goldman believes value stocks are the best type of stock to purchase. The note to clients mentions that they see value stocks are a better bet than growth stocks due to the current economic climate. Goldman bases this claim on the historical performance of value and growth stocks during recessions. Normally, growth stocks tend to require high amounts of leverage which presents a financial risk in addition to the technology risks that come from the research and development that provide growth opportunities in these stocks. Because of this growth, stocks tend to perform worse than the overall market during a recession. Value stocks, however, tend to be undervalued based on traditional financial valuation metrics, which are the same metrics that investors default to during times of economic downturn. As such, these stocks tend to be less impacted by a recession. Investors estimate a 48% chance of a recession in the next two years. Many argue we are already in a recession after suffering two consecutive quarters of GDP contraction this year. Based on this economic reality, Goldman Sachs has decided to back value stocks over growth stocks. Here is their shortlist with some added insights. As always, if you have any comments or suggestions for future trends to investigate, please reach out on Twitter. Onward and Upward, |
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 Stock To Watch: Pfizer (PFE) - The stock is down 22.5% so far this year.
- It has a P/E ratio of 8.
- It has an average value fun underweight of -0.81.
- The stock may also benefit from the recent release of Omicron-specific vaccines.
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 Stock To Watch: Ford Motor (F) - The stock is down 26.8% so far this year.
- It has a P/E ratio of 8.
- Its average value fund underweight is -0.20.
- The stock may also benefit from the recent Inflation Reduction Act, providing incentives and funding for EVs and batteries.
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 Stock To Watch: Cisco Systems (CSCO) - The stock is down 29% so far this year.
- It has a P/E ratio of 13.
- Its average value fund underweight is -0.07.
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 Stock To Watch: AT&T (T) - The stock is down 8.6% so far this year.
- It has a P/E ratio of 7.
- Its average value fund underweight is -0.45.
- The stock will also benefit from the continued growth of its 5G network.
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 Stock To Watch: United Airlines (UAL) - The stock is down 14.8% so far this year.
- It has a P/E ratio of 7.
- Its average value fund underweight is 0.05.
- The stock may also benefit from the increase in travel as international COVID-19 related restrictions continue to be removed or relaxed.
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 Stock To Watch: CVS Health (CVS) - The stock is down 2.4% so far this year.
- It has a P/E ratio of 11.
- Its average value fund underweight is -0.10.
- The stock may also benefit from its recent acquisition of Signify Health to expand into the home healthcare market.
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 Stock To Watch: Boston Properties (BXP) - The stock is down 28.9% so far this year.
- It has a P/E ratio of 11.
- Its average value fund underweight is -0.06.
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 |  | Liam Gill is a founder, lawyer and investor.
He previously founded Fumarii Technologies, which became a top 20 ranked cloud computing service (Yahoo Finance! 2019) valued at over $30M. He holds an LLB Laws (UK), MSc Management and Master of Laws and currently practices law in Vancouver, Canada.
|   | | Editor | Vibha Chapparike is a Freelance Writer & Editor at Inside.com. With her post-graduation in Management and Finance completed, Vibha is expanding her knowledge in Venture Capital, Business, and Startups. Previously, she had a career in Public Relations and Communications with Women in Cloud - an organization on a mission to create $1B in economic access for female technology entrepreneurs. An ardent reader and writer currently residing in Singapore, you can follow Vibha on Twitter @VChapparike. | |
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