18 Stocks with High Upside in a Stock-Pickers' Paradise: GS

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Goldman Sachs: These 18 companies have double-digit upside in the best market for stock-pickers since 2016

Large gaps between cheap and expensive stocks are also a tailwind for investors.Investors taking a top-down look at markets to find opportunities should study individual stocks instead, according to Goldman Sachs.

Micro factors, or stock-specific factors, drove 71% of returns for the typical S&P 500 firm in the last six months, according to Goldman Sachs, which was the highest rate since 2016. That means large-scale macroeconomic drivers explained only slightly more than a quarter of movements — down from 59% a year ago.have risen. The spread between leaders and laggards in markets has climbed to just above the 30-year average, Kostin wrote.

"These developments ultimately support a focus on single stock opportunities, particularly around earnings seasons," Wilson wrote. One way to separate the wheat from the chaff is by looking at valuation dispersions, which are also historically wide right now. The richest 20% of stocks across market sectors trades at a 30x earnings multiple, which is nearly triple that of the bottom quintile, according to Goldman Sachs.

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Goldman names stocks with the greatest alpha opportunities — including one with 70% upsideGoldman Sachs is providing ideas to outperform the stock market in the current economic climate, focusing on microeconomic factors dominating the market action in 2023.
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