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Chevron, Micron and 18 More Stocks Goldman Recommends to Ride Out the Storm

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Qualcomm is one of the 20 stocks on Goldman Sachs’ ‘margin of safety’ list.

Pau Barrena /AFP via Getty Images


Exxon Mobil
,


Qualcomm
,


Micron

and


Chevron

are just some of the 20 “margin of safety” stocks Goldman Sachs recommends as macroeconomic and geopolitical headwinds have roiled U.S. stocks markets.

The Russian invasion of Ukraine, elevated inflation and Covid lockdowns in China are some of the macro developments Goldman Sachs said were leading to a “near-bear market.” As of Monday, the S&P 500 index has fallen 15.8% this year. According to Goldman, roughly 60% of large-cap growth mutual funds have lagged their benchmarks in 2022.

In the report, Goldman analysts looked for three characteristics to identify the 20 stocks that trade at valuations below previous bear market lows, including size and liquidity, balance sheet strength and attractive valuations. Goldman said “the median ‘margin of safety’ stock has outperformed the S&P 500 by four percentage points year to date.”

“We screen for stocks with a ‘margin of safety’ meaning the valuation today assuming EPS estimates for next year are reduced by 20% would still be attractive compared with how the shares were valued during previous bear markets,” the Goldman report said.

The list of 20 stocks include:


Best Buy

(ticker: BBY),


Franklin Resources

(BEN),


ConocoPhillips

(COP),


Coterra Energy

(CTRA), Chevron (CVX),


Devon Energy

(DVN),


Electronic Arts

(EA),


EOG Resources

(EOG),


Microchip Technology

(MCHP), Micron Technology (MU),


Pioneer Natural Resources

(PXD), Qualcomm (QCOM),


Qorvo

(QRVO),


Robert Half International

(RHI),


Skyworks Solutions

(SWKS),


T. Rowe Price Group

(TRWO),


Tyson Foods

(TSN),


Take-Two Interactive Software

(TTWO),


Vertex Pharmaceuticals

(VRTX) and Exxon Mobil (XOM).

Write to Angela Palumbo at angela.palumbo@dowjones.com

Warren Buffett says these are the best stocks to own when inflation spikes — with consumer prices still surging, it’s time to follow his lead

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