Goldman Adds B/E Aerospace, Solaredge to Pie-Shift Growers List

Goldman Sachs adjusted its 24 "pie-shift growers" list, and added Vestas Wind System ADR VWDRY, Solaredge Technologies Inc SEDG, Safran SA (SAFRY and B/E Aerospace Inc BEAV. The brokerage also removed four companies namely Cummins Inc. CMI, Fanuc Corp FANUY, Tiffany & Co.TIF and Zulily (delisted). Zulily has been removed as it has been de-listed following the acquisition by Liberty Interactive Group QVCA. Goldman noted that it turns to companies with strong aftermarket in the aerospace & defense (Safran and BEAV). In the low carbon economy, it looks for returns and technology leaders in the burgeoning onshore wind (Vestas) and solar PV (SolarEdge) industries. "We no longer believe that the micro trends within engines in Emerging Markets highlighted in our November 2014 report will be enough to offset structural and cyclical headwind in Cummins' core markets of US and Europe. We remove Tiffany and Fanuc as our analyst forecasts do not imply further revenue growth for these stocks," analyst Aaron Ibbotson wrote in a note to clients. Goldman noted that the structural deterioration of corporate profit growth has been a confounding challenge for long-term equity investors. In Europe, there has been no aggregate EPS improvement since 2012, and 2016 looks set to be another year of low or absent growth. In Asia, earnings have been flat since 2013, and recent evidence suggests that the US is converging with the rest of the world, rather than the other way round. The brokerage said micro trends can offer reliable growth. It added that investors should look for growth stories driven by structural shifts within end-markets – or ‘pie shifts'.
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