Photo: Bloomberg TV
David Kostin and the Goldman Sachs U.S. equity strategy team are out with an August update to their Growth-at-a-Reasonable-Price (GARP) model, and five new sub-sectors have entered the GARP zone.Kostin says that this month, Auto Parts & Equipment, Construction & Engineering, Drug Retail, Health Care Distributors, and Other Diversified Financial Services now offer growth at a reasonable price.
On the other hand, these sectors no longer offer growth at a reasonable price: Casinos & Gaming, Consumer Electronics, Department Stores, Electronic Equipment & Instruments, Gold, Home Entertainment Software, Multi-line Insurance, and Residential REITs.
Goldman noted that their GARP strategy underperformed the S&P 500 in July, returning only 0.3 per cent while the broader index of stocks was up 1.4 per cent for the month.
Here is Kostin’s GARP map, showing the broader sectors that are in the GARP zone:
Photo: Goldman Sachs