In its latest monthly portfolio strategy research report, Goldman Sachs Group, Inc. (NYSE:GS) highlights the stocks most likely to post strong sales and EPS growth in 2013. Goldman also had some interesting data on holders of US equities.
The Russell 1000 Growth Index is trading 9 percent above its previous peak while S&P 500 Index was just 3 percent below its 2007 peak at the end of February.
Joel Greenblatt Owned Hedge Fund On Why Value Investing Isn’t Working Now
Acacia Capital was up 12.27% for the second quarter, although it remains in the red for the year because of how difficult the first quarter was. The fund is down 14.25% for the first half of the year. Q2 2020 hedge fund letters, conferences and more Top five holdings Acacia's top five holdings accounted for Read More
A surprising fact revealed in the report is that retail investors have invested $9.8 trillion in the U.S. equities, or 38 percent of the total $25.8 trillion corporate equity holdings. Additionally, $812 billion hedge fund assets belong to US retail investors. To put in context hedge funds have total assets under management of approximately $2 trillion. This would mean that approximately 40% of hedge fund assets come from retail investors in the US, the remainder comes from foreign investors and institutions.
On the other hand, mutual funds owned 24 percent of the corporate equity worth $6.2 trillion as of February 28. International investors had $3.5 trillion or 13 percent of U.S. equities. Pension funds, government retirement funds and insurance companies owned $2.3 trillion, $2 trillion and $1.8 trillion in corporate equities respectively.
Another highlight of the report was the ranking of stocks in S&P 500 index based on expected 2013 sales and earnings growth. Google Inc (NASDAQ:GOOG) handily topped the list with 43 percent expected sales growth in 2013. Second in the ranking is Eaton Corp., which grew just 2 percent in 2012. Eaton is expected to grow at 40 percent this year. Amazon.com, Inc. (NASDAQ:AMZN) occupied third spot with expected growth rate of 24 percent. Kinder Morgan Inc (NYSE:KMI), which posted 21 percent sales growth in 2012, is expected to grow 23 percent. Semiconductor maker QUALCOMM, Inc. (NASDAQ:QCOM)’s sales should rise 21 percent this year.
In terms of expected EPS growth, The Dow Chemical Company (NYSE:DOW) led the pack with 23 percent. Dow earnings rose 24 percent last year. Priceline.com Inc (NASDAQ:PCLN) came in second with 23 percent expected EPS growth rate. Comcast Corporation (NASDAQ:CMCSA) is also expected to post 23 percent increase in its earnings this year. Verizon Communications Inc. (NYSE:VZ) is ranked fourth with 21 percent 2013E EPS growth.
Last year, Verizon’s earnings grew just 8 percent. Coffee chain Starbucks Corporation (NASDAQ:SBUX) is expected to continue its pace of EPS growth this year as well with 21 percent. Starbucks’ earnings rose 18 percent last year.
Now let’s have a look at what strategies, sectors and styles are working this year.
While consumer staples and healthcare sectors have performed exceptionally well, gold and euro have been the worst performers.