Goldman Sachs: Europe has the GRANOLAS

Goldman Sachs: Europe has the GRANOLAS

30 april 2020

Europa
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According to Goldman Sachs, Europe is now dominated by what the company has dubbed the GRANOLAS - the largest European companies by market cap: Glaxosmithkline, Roche, ASML, Nestle, Novartis, Novo Nordisk, L’Oreal, LVMH, Astrazeneca, SAP, Sanofi.

 

Goldman Sachs reports:

  • The outperformance of Growth versus Value was a major feature of the 2009-20 cycle. One of the clearest trends was the success of Technology. This led to an impressive outperformance of the US equity market, particularly the FAAMG stocks.
  • Europe lacks Growth companies but indices have changed. Twenty years ago the 10 biggest companies in Europe were Telecoms and Oil names, with the exception of one bank (HSBC). If we fast-forward to today, we see there are no Banks, Oil or Telecoms companies among the largest 10. The Technology industry has grown bigger than the Oil sector and is close in size to the Banks sector.
  • Europe has the GRANOLAS. Europe is now dominated by what we have dubbed the GRANOLAS - the largest European companies by market cap: Glaxosmithkline, Roche, ASML, Nestle, Novartis, Novo Nordisk, L’Oreal, LVMH, Astrazeneca, SAP, Sanofi. These stocks have relatively strong balance sheets, low volatility growth and good dividend yields.
  • We think the leaders of the forthcoming cycle will be companies that are able to generate earnings growth, sustainable dividend payouts and have healthy balance sheets. The GRANOLAS stocks may not ALL do well, but together we think they offer some quality: (1) Growth, (2) Stability, (3) Income. 

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