MORGAN STANLEY: Here are 36 stocks that should thrive no matter what

There’s a lot to be worried about in the stock market. The bull market is in its sixth year as earnings growth taper and the global economy slows.

But even if the markets and economy as a whole were to turn, there will continue to be growth stories here and there that will deliver no matter what.

These are the secular growth stories.

On Tuesday, Morgan Stanley released its annual list of secular growth stocks.

“To build this Secular Growth Stocks list, we started by screening Morgan Stanley’s North America coverage for stocks rated Overweight or Equal-weight, where our analysts forecast 2014-17 growth of at least 15% for EPS and at least 10% for revenue,” Morgan Stanley explained. “We then we asked our analysts to identify the stocks from this universe for which they had high conviction in the company’s “secular growth” characteristics, regardless of the economic environment, including some stocks that exhibited strong growth but fell slightly outside the original screen’s parameters (for example, several of the names had negative base-year EPS).”

We’ve summarized Morgan Stanley’s list here, including projected compound annual growth in earnings per share from 2014 and 2017, the projected 2016 price-to-earnings (P/E) ratio, and the price-to-earnings-to-growth (PEG) ratio. Growth stocks with lower PEGs are generally considered cheaper.

You’ll not only find some well-known names on the list — including Google, Facebook and Apple — but also a smaller companies that Morgan Stanley says are under-the-radar.



Ticker: ABMD

Projected EPS growth: 86%

Projected 2016 P/E: 110.6

PEG ratio: 1.3

Comment: 'While the bulk of recent growth has been increased utilization at existing sites, management sees a clear runway as interventional cardiologists shift focus from single-vessel stenting to treatment of complex high-risk patients (CHIP) with triple-vessel disease and poor ejection fractions who are risky candidates for surgery,' said analyst David Lewis

Alexion Pharmaceuticals

Ticker: ALXN

Projected EPS growth: 19%

Projected 2016 P/E: 29.9

PEG ratio: 1.6

Comment: 'Alexion's growth continues to be driven by its key drug, Soliris, expected to read-out label expansion studies in two additional rare diseases in 2016, which could add an additional ~$US1B to top-line sales,' said analyst Matthew Harrison.

American Tower Corp.

Wikimedia Commons

Ticker: AMT

Projected EPS growth: 16%

Projected 2016 P/E: 33.6

PEG ratio: 2.1

Comment: 'We favour the fundamentals of the tower business model, the secular growth story around mobile data, and high visibility,' said analyst Simon Flannery. 'We believe the set-up is attractive into 2016 in the United States, and trends look to be stabilizing in certain key markets, such as India and Mexico.'


Antonio Villas-Boas/Tech Insider

Ticker: AAPL

Projected EPS growth: 20%

Projected 2016 P/E: 10.7

PEG ratio: 0.5

Comment: 'We see premium pricing, high usage, repeat purchases, and category expansion as reasons AAPL should trade more in line with platform stocks longer term,' said analyst Katy Huberty.

Avago Technologies

Avago Technologies

Ticker: AVGO

Projected EPS growth: 28%

Projected 2016 P/E: 12.7

PEG ratio: 0.4

Comment: 'The company has dominant market share of 75-80% in premium filters for smartphones, where we expect the total addressable market to nearly double to $US4bn by 2017, led by increasing adoption of LTE phones,' said analyst Craig Hettenbach.

Celgene Corp

Ticker: CELG

Projected EPS growth: 29%

Projected 2016 P/E: 19.6

PEG ratio: 0.7

Comment: 'Celgene continued to be dominated by Revlimid, its treatment for multiple myeloma, which helps drive sustained top-line growth of >20%,' said analyst Matthew Harrison. 'We look for diversification from the pipeline starting late in the decade around 2018 and beyond.'

Cerner Corporation


Ticker: CERN

Projected EPS growth: 21%

Projected 2016 P/E: 24.2

PEG ratio: 1.1

Comment: 'As one of the leading players, Cerner looks well-positioned from the secular trend toward increased health record digitization and management of insurance risk using advanced analytics on patient data,' said analyst Ricky Goldwasser. 'Having recently won the Department of Defence EMR contract, one of the largest the industry has seen, Cerner is likely to continue to be a leader in the space.'

Chipotle Mexican Grill

Hollis Johnson/Business Insider

Ticker: CMG

Projected EPS growth: 17%

Projected 2016 P/E: 34.8

PEG ratio: 2.0

Comment: 'Over time, we believe Chipotle has the potential to apply its formula to secondary concepts, driving strong domestic unit growth for the foreseeable future, as well as to pursue international expansion,' said analyst John Glass.

Fitbit Inc.


Ticker: FIT

Projected EPS growth: 36%

Projected 2016 P/E: 38.3

PEG ratio: 1.1

Comment: 'We believe the wearable market is large enough for at least two successful brands long term,' said analyst Katy Huberty. 'That view is supported by the latest survey, where Fitbit's purchase intention share improved to 17%, from 15% in the May survey, despite improving Apple Watch distribution.'


Adam Berry / Getty

Ticker: GOOGL

Projected EPS growth: 17%

Projected 2016 P/E: 19.8

PEG ratio: 1.2

Comment: 'As the dominant player in paid search, Google continues to experience secular growth as advertising dollars shift into digital,' said analysts Brian Nowak.

Lifepoint Hospitals

Duke Medicine
Person Memorial Hospital in Roxboro, NC.

Ticker: LPNT

Projected EPS growth: 21%

Projected 2016 P/E: 15.6

PEG ratio: 0.7

Comment: 'Premier rural healthcare provider with a diverse geographic footprint and service offerings, which position the company well to capitalise on positive secular growth trends in the industry including healthcare reform, the ageing of the US population, and improving utilization trends over the next few years,' said analyst Andrew Schenker.

Medidata Solutions Inc.

Sean Gallup/Getty Images
A visitor tries out a tablet computer next to a cloud computing and technology symbol at the Deutsche Telekom stand at the 2013 CeBIT technology trade fair on March 5, 2013 in Hanover, Germany.

Ticker: MDSO

Projected EPS growth: 27%

Projected 2016 P/E: 37.9

PEG ratio: 1.4

Comment: 'A provider of cloud-based solutions for drug clinical trial management, Medidata is well-positioned to continue to benefit from an increase in biotech spending and innovation, growing drug trial complexity, and new sources of data such as wearable devices,' said analyst Zachary Sopcak.

Molina Healthcare Inc.

Ticker: MOH

Projected EPS growth: 47%

Projected 2016 P/E: 20.5

PEG ratio: 0.4

Comment: 'Medicaid pure-play managed care company with operations in a number of states including California, Florida, and Texas,' said analyst Andrew Schenker. 'The company looks well-positioned for long-term growth from 3 areas in the Medicaid space, including (1) expansion in lives, (2) dualeligibles members, and (3) the movement of new Medicaid populations into managed care or the expansion of existing programs.'

Oaktree Capital Group, LLC

Screengrab via Bloomberg
Co-founder and chairman of Oaktree, Howard Marks.

Ticker: OAK

Projected EPS growth: 15%

Projected 2016 P/E: 9.5

PEG ratio: 0.6

Comment: 'We see continued secular growth in allocations to alternative investments driven in part by demographic trends, a persistent low interest rate environment, and investors struggling to meet hurdle rates,' said analyst Michael Cyprys.

Proofpoint Inc.

Proofpoint CEO Gary Steele

Ticker: PFPT

Projected EPS growth: n/m

Projected 2016 P/E: n/m

PEG ratio: n/m

Comment: 'As a share gainer in a market still ripe for disruption, with a growing cross-selling opportunity and direct exposure to ramping cloud infrastructure/app adoption, PFPT is one of the more compelling vendors in security, in our view,' said analyst Melissa Gorham. 'With the top 5 vendors in the email security market holding 40-45% share today, Proofpoint looks to have plenty of runway for continued growth in its core email security market.'

Sabre Corp.

Heathrow Airport

Ticker: SABR

Projected EPS growth: 20%

Projected 2016 P/E: 20.1

PEG ratio: 1.0

Comment: 'SABR has been one of the best-performing stocks in our coverage universe year-to-date and we see room for additional upside as we head into the end of 2015,' said analyst Brian Essex. 'With substantial barriers to entry, the company enjoys consistent durable cash flow from its core GDS business with upside potential from its higher-growth Airline and Hospitality solutions business.'

Justin Sullivan/Getty Images
Salesforce CEO Marc Benioff

Ticker: CRM

Projected EPS growth: 40%

Projected 2016 P/E: n/m

PEG ratio: n/m

Comment: 'With a SaaS-based application suite extending from Sales to Customer Support, to Marketing, to Platform services, to Analytics and Internet of Things, remains one of the best-positioned names in Software to benefit from the increased shift of applications to the cloud, in our view,' said analyst Keith Weiss.

ServiceNow Inc.

ServiceNow founder, chief product officer, Fred Luddy

Ticker: NOW

Projected EPS growth: n/m

Projected 2016 P/E: n/m

PEG ratio: n/m

Comment: 'ServiceNow is a disruptive share gainer with a well-established position in the $US6B market for ITSM and an expanding product set addressing an additional $US39B of market opportunity,' said analyst Keith Weiss. 'The company has been effectively scaling to address this large opportunity and we forecast a ~40% revenue CAGR through CY16e.'

Skechers USA Inc.

Skechers Facebook

Ticker: SKX

Projected EPS growth: 40%

Projected 2016 P/E: 20.8

PEG ratio: 0.5

Comment: 'We expect strong global growth to continue due to better infrastructure, an improved brand image, and a compelling value proposition,' said analyst Jay Sole. 'The company is in the early innings of international expansion and sales can double over the next several years, in our view.'

Tableau Software

Ticker: DATA

Projected EPS growth: 40%

Projected 2016 P/E: n/m

PEG ratio: n/m

Comment: 'Tableau's software reduces the complexity and inflexibility associated with traditional business intelligence tools, allowing a broader population of users to derive insights from a diverse set of data sources,' said analyst Keith Weiss. 'By expanding the overall market opportunity to more users, DATA should sustain 30%+ growth for the next several years, in our view.'

Under Armour Inc.

Under Armour Facebook

Ticker: UA

Projected EPS growth: 26%

Projected 2016 P/E: 67.0

PEG ratio: 2.6

Comment: 'Under Armour looks to benefit from the continued consumer trend toward health and fitness,' said analyst Jay Sole.

Veeva Systems Inc.

Veeva Systems

Ticker: VEEV

Projected EPS growth: 38%

Projected 2016 P/E: n/m

PEG ratio: n/m

Comment: 'A Vertical SaaS leader in the Life Sciences space, Veeva should be able to parlay its leadership in Sales Force Automation into new market segments like Data Management and Content Management, expanding its total addressable market and increasing the company's lead as the preferred Cloud provider for Life Sciences IT,' said analyst Stan Zlotsky.



Ticker: WDAY

Projected EPS growth: n/m

Projected 2016 P/E: n/m

PEG ratio: n/m

Comment: 'With continued enhancements to the core HR and Financials solutions and Workday in aggressive pursuit of edge use cases in both product markets, we think the company is positioning itself for a much longer and sustained growth trajectory (albeit at potentially lower rates) than investors expect,' said analyst Keith Weiss.

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