MORGAN STANLEY: Buy these 25 growth stocks to profit from huge gains, even if the global economy tanks
Morgan Stanley's equity analysts expect 2019 to be a year of consolidation for the stock market.
They compiled a list of 25 stocks that should be able to grow their earnings independently of broader market weakness or an economic slowdown.
The stock market has reached a critical juncture that changes the game for investors, according to analysts at Morgan Stanley.
They expect the growth companies that have led gains for most of this bull market run to give way to value stocks. Also, they expect valuation metrics like price-to-earnings ratios to matter more than earnings growth in stock selection.
But don't take this viewpoint as the death knell for companies with outsized growth. Morgan Stanley expects select stocks to continue growing their earnings — and, subsequently, their stock prices — even as the market consolidates. Additionally, these companies offer competitive advantages like market share gains and pricing power that should help them continue growing even if there is a slowdown in the global economy.
In a client note, they listed 25 of these North American companies that have been classified as growth companies for 48 straight months, and have generated positive revenue growth in each of the last 12 quarters.
What's more, only stocks they rated overweight or equal-weight made the cut.
That's where Morgan Stanley's work ends, however. The analysts cautioned that investors still need to study the specific risks and opportunities attached to each company so they know the range of outcomes to expect. But they have high conviction that these 25 names will stand tall in the face of market adversity.
Here are the stocks:
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