Value beats growth over the long run, just ask Warren Buffett. But with all due respect to the
"[G]rowth stocks on the whole tend to be less impacted by cyclical forces," Morgan Stanley's chief U.S. equity strategist Adam Parker wrote in a research report this week that highlighted 36 companies the firm expects "can grow strongly even if the global economy grows more slowly than our current GDP forecasts."
Stocks that can outperform middling growth in countries like the U.S. are particularly appealing at a time where consensus expectations for major economies are dialing back. China's shift to a consumer-driven model is hitting significant speedbumps and was a big part of why the
So where do stockpickers turn in such uncertain times? Morgan Stanley says look to growth stocks, which are trading at a smaller premium to value stocks than they have historically.
The list of 36 stocks Morgan Stanley supplies is filled with the usual suspects --
Morgan Stanley's roster of stocks finds room for multiple players in a number of industries. It features apparel companies
There is some peril involved with chasing growth stocks. The consensus view that health care and biotech remain attractive industries for the long term remains largely intact, but the industry has taken a pounding of late. That didn't deter Morgan Stanley, which included Abiomed,
While many of the names among the group are regularly touted as growth favorites, Morgan Stanley tries to make clear that its secular growth list is strictly for thoroughbreds, not ponies saddled with close ties to global growth. The revenue projections alone for the group make clear that growth among these companies is expected to outpace that of the global economy:
Company | CAGR (Revenue)* | YTD Gain/Decline |
Abiomed | 29% | 121% |
Alexion Pharmaceuticals | 28% | -12% |
American Tower | 12% | -6% |
Apple | 13% | -1% |
Avago Technologies | 24% | 16% |
Celgene | 20% | 4% |
Cerner | 21% | -5% |
Chipotle Mexican Grill | 15% | 4% |
Edwards Lifesciences | 10% | 12% |
34% | 18% | |
Fitbit | 57% | -19% |
Google (Alphabet) | 16% | 25% |
KKR & Co | 17% | -19% |
LendingClub | 62% | -44% |
Lifepoint Health | 10% | 2% |
30% | -15% | |
Medidata Solutions | 21% | -13% |
Mobileye | 69% | 19% |
Molina Healthcare | 22% | 18% |
Monster Beverage | 15% | 24% |
Oaktree Capital | 12% | -5% |
Palo Alto Networks | 46% | 41% |
Pandora Media | 23% | 15% |
Proofpoint | 30% | 27% |
Sabre | 11% | 41% |
Salesforce.com | 25% | 24% |
ServiceNow | 37% | 9% |
Skechers USA | 17% | 121% |
Splunk | 41% | 8% |
Starbucks | 13% | 42% |
Tableau Software | 41% | -5% |
Tesla Motors | 41% | 4% |
Under Armour | 23% | 44% |
Veeva Systems | 34% | -7% |
WhiteWave Foods | 11% | 18% |
Workday | 49% | -9% |
Average | 27% | 14% |
*2014-2017 (expected) |