MT Insider: Goldman Says Equity Investors to Shift Focus To Economic Growth; Sees 20 'Opportunity' Stocks

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In a report out today, Goldman Sachs outlined 20 relative opportunity stocks that have potential for upside. The recommendations are based on the premise that equity investors will shift their primary focus from monetary and fiscal policy issues to economic growth over the next six to 12 months.

In the near-term, this thesis likely assumes successful resolutions to Congressional debate over the country's debt ceiling and the threat of a government shut down as well as the announcement of a successor for Federal Reserve Chairman Ben Bernanke (with Janet Yellen as the current front-runner).

With investor demand for value-oriented stocks increasing, Goldman finds that multiples are lowest in the Consumer Discretionary, Industrials and Utilities sectors while the Financials sector has above average dispersion.

The report also cites that value companies have outperformed their peers by almost 15% on both a sector neutral and equal weight basis. This is evidenced by the Russell 1000 Value Index, which has outperformed its comparative index for growth by almost 10% since April 2012.

Specifically, the report identifies 20 subsector peers with the same average P/E of approximately 15 times earnings and three times the firm's FY14 EPS growth forecasts. Additionally, Goldman adds its own proprietary growth Micro Equity Factor (MEF) model as a component to the screen.

The companies that GS highlights as attractive value opportunities are:

- Dollar Tree ( DLTR )

- Urban Outfitters ( URBN )

- General Mills ( GIS )

- Lincoln National ( LNC )

- Invesco Ltd ( IVZ )

- Ameriprise Financial (AMP)

- Perrigo (PRGO)

- Mylan (MYL)

- AmerisourceBergen (ABC)

- Textron (TXT)

- Precision Castparts (PCP)

- Qualcomm (QCOM)

- Citrix Systems (CTXS)

- MasterCard (MA)

- Visa (V)

- Cisco Systems (CSCO)

- LSI Corp (LSI)

- Teradata Corp (TDC)

- AT&T (T)

- PG&E (PCG)

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

Copyright (C) 2014 All rights reserved. Unauthorized reproduction is strictly prohibited.

This article appears in: Investing , Commodities

Referenced Stocks: DLTR , GIS , IVZ , LNC , URBN

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