Goldman Sachs: 5 "Superstar" Stocks to Buy Now

Goldman Sachs’ analysts last month homed in on an investing strategy designed to generate outsize returns for investors.

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Goldman Sachs’ analysts last month homed in on an investing strategy designed to generate outsize returns for investors. The strategy focuses on stocks that are dominating their respective industries – aka, “superstar stocks.” Interestingly, the number of these giant, dominant companies are on the rise due to a wave of consolidation across multiple industries.

“The market positioning of superstar firms often allows for greater bargaining power over consumers and workers and higher profitability,” the firm’s chief U.S. equity strategist, David Kostin, explained to clients. “Superstar firms have been one driver of the explosion in US corporate margins post-crisis.”

And the numbers speak for themselves. Kostin writes that companies with the highest share of industry sales have returned 49% since 2015. In contrast, companies with the lowest share of industry sales have delivered returns of just 16% during the same period.

Here are five “superstar” stocks to buy, according to Goldman Sachs. We’ll look at the bull theses behind each one, and see what the rest of Wall Street thinks about these stock picks.

Data is as of July 2.

Harriet Lefton
Contributing Writer, Kiplinger.com
Harriet Lefton, originally from the U.K., began her career as a journalist specializing in the niche world of metal markets. She graduated from the University of Cambridge before becoming a qualified U.K. lawyer. Now she has turned her attention to the world of financial blogging, covering U.S. stocks, analysts and all manner of things finance-related.