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Goldman Sachs: More Stock Declines Mean Buying Opportunity

Goldman Sachs analysts cite Amazon, Tesla, Starbucks, FedEx, Salesforce, AMD and Chipotle as stocks to consider.
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If stocks continue their decline, should investors buy or sell?

Goldman Sachs strategists, led by Peter Oppenheimer, take the bullish approach. 

“Any further significant weakness at the index level should be seen as a buying opportunity, … albeit with moderate upside through the year as a whole,” they wrote in a commentary Wednesday.

“We believe we are in a correction within a bull market cycle,” the strategists said. “We remain in the early part of the growth phase. Returns will likely be low from here, but the bull market should continue (so long as economies grow).”

The transition of monetary policy to tight from easy and the shift to inflation from deflation “should support further re-rating of selected value assets from here,” the strategists said.

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“Continued under-valuation, improving profit fundamentals, de-carbonization and growing capex [capital expenditures] all support these trends.”

The strategists cite a slew of stocks that have buy ratings from Goldman, have dropped at least 20% from their highs and can be classified as “innovators, disruptors, enablers and adaptors.”

Among stocks that have dropped 20% to 25%, Goldman lists Amazon  (AMZN) - Get Amazon.com, Inc. Report, Tesla  (TSLA) - Get Tesla Inc Report, Starbucks  (SBUX) - Get Starbucks Corporation Report and Fedex  (FDX) - Get FedEx Corporation Report.

Among stocks that have slid 25% to 30%, Goldman cites Salesforce  (CRM) - Get salesforce.com, inc. Report, Advanced Micro Devices  (AMD) - Get Advanced Micro Devices, Inc. Report and Chipotle Mexican Grill  (CMG) - Get Chipotle Mexican Grill, Inc. Report.

Among stocks that have lost 30% to 35%, Goldman tabs Disney  (DIS) - Get Walt Disney Company Report and Lululemon Athletica  (LULU) - Get Lululemon Athletica Inc Report.

Among stocks that have lost 35% to 40%, Goldman selected Yeti  (YETI) - Get YETI Holdings, Inc. Report. Among stocks that have lost 40% to 45%, Goldman chose Lyft  (LYFT) - Get Lyft, Inc. Class A Report.