Goldman Sachs US equity chief breaks down how investors can outperform with assets other than big tech stocks

  • David Kostin, Goldman Sachs chief US equity strategist told Bloomberg on Thursday that there’s a way investors can have growth in their portfolios without being completely invested in big tech stocks.
  • Kostin said the strategy is to look for companies that emulate big tech from an earnings, revenue, and sales growth point of view.
  • He named PayPal, Vertex, and Intuitive Surgical as mid-sized companies that can deliver consistent revenue growth like big tech stocks.

Goldman Sach’s David Kostin told Bloomberg on Thursday that investors can outperform and keep growth in their portfolios without being solely invested in large-cap technology stocks.

The chief US equity strategist suggested investors look for companies that can emulate big tech stocks from an earnings, revenue, and sales growth point of view. Kostin named PayPal,Vertex, and Intuitive Surgical as examples. He said these companies have delivered 10% revenue growth in the past and are projected to keep doing so.

“When I work with analysts at Goldman, these are some of the stocks that we screen as a strategist, and then also that corresponds with the fundamental analysis of the companies,” he said.

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Kostin added: “Those growth companies will still do well, but these are companies that are maybe more middle size, sort of in the ranking order, maybe number 71 or 73, 75, they can move up the ranking to be one of the larger stocks, and that leads to outperformance.” He also said that in the longer term, he believes secular growth companies that have generated revenue growth despite the pandemic will perform better than the bargain value stocks that many investors are looking into right now to play the economic recovery.