6 Cheap Stocks Goldman Sachs Knew Would Make You Money

This story has been updated from 3:18 pm ET with updated stock prices and charts.

Which stocks off of Goldman Sachs' (GS - Get Report) list of 14 "cheap stocks" had good returns in April? We found only six of the 14 stocks had positive performance over the past month.

According to a note to clients titled "Late-Cycle Playbook: Lack of cheap, under-earning sectors favors single-stock selection," investors looking at entire sectors will have a hard time finding value, but there are opportunities on a stock-by-stock basis.

"Today not a single sector screens as being both cheap and under-earning," Goldman analysts Jessica Binder Graham and Christopher Wolf wrote in the April 1 note to clients. "Thus, such a top-down perspective may suggest a lack of 'value' to be found in today's market, but delving down one layer deeper we do find single-stock opportunities with 13% of our coverage fitting these criteria."

Based on this idea, Goldman offered three investment strategies in the note to clients on how to play stocks: buy "cheap under-earners with upside," sell "expensive over-earners" and buy "incremental margin winners."

Goldman found 14 stocks among its coverage list that were either buy- or neutral-rated based on the strategy, which looked specifically at inexpensive stocks that are "incremental margin winners" and are expected to have strong top-line growth in 2016 and 2017.

TheStreet checked up on those "cheap stocks" a month later to see how they had done. We found just six of the 14 were in the black since April 1. 

Amazon
Amazon

Shares of Amazon (AMZN - Get Report) , the Seattle-based online commerce and cloud services provider, are up 11.1% in April, primarily on the back of a strong first-quarter earnings report.

Goldman Sachs has a buy rating and a price target of $800 on Amazon. Amazon's stock is listed on Goldman's "Americas Conviction Buy List."

Amazon is projected to have sales growth of 24% and an EBIT margin of 5% in 2016, according to Goldman.

VeriFone Systems
VeriFone Systems

Shares of VeriFone Systems (PAY) , a San Jose, Calif.-based electronic payments technology and equipment company, are up 0.85% in April.

VeriFone is expected to report quarterly earnings in early June.

Goldman Sachs has a neutral rating and a $31 target price on VeriFone.

VeriFone is projected to have sales growth of 8% in 2016, according to Thomson Reuters. Goldman projects EBIT margins of 7% in 2016, according to the April 1 note.

Textron
Textron

Shares of Textron (TXT - Get Report) are up 6.1% in April.

The Providence, R.I.-based commercial aerospace company reported better-than-expected first-quarter top and bottom line results on April 20.

The company's brands include the Bell helicopter, Cessna aircraft and Beechcraft.

Textron also reaffirmed its earnings-per-share guidance of $2.60 to $2.80 for 2016. Analysts are looking for earnings of $2.71 per share.

Goldman Sachs has a neutral rating and a $41 target price on Textron.

Textron is projected to have sales growth of 5% in 2016, according to Thomson Reuters. Goldman projects EBIT margins of 10% in 2016, according to the April 1 note.

B/E Aerospace
B/E Aerospace

Shares of B/E Aerospace (BEAV) are up 5.4% in April.

On April 20, the Wellington, Fla.-based commercial aerospace company reported first-quarter net income of $82.6 million, or 81 cents a share, ahead of Wall Street expectations.

Goldman Sachs has a buy rating and a $57 target price on B/E Aerospace.

B/E Aerospace is projected to have sales growth of 4% in 2016, according to Thomson Reuters. Goldman projects EBIT margins of 19% in 2016, according to the April 1 note.

Brinker International
Brinker International

Shares of Brinker International (EAT - Get Report) are up 0.81% this month.

The restaurant chain saw shares slump following its quarterly earnings report on April 19 in which it reported sales that missed expectations and same-store sales declines as compared to the prior year's quarter.

Goldman Sachs has a neutral rating and a $45 target price on the Dallas-based owner of several restaurant chains, including Chili's Grill & Bar and Maggianos.

Brinker International is projected to have sales growth of 9% for its fiscal 2016 (which ends in June), according to Thomson Reuters. Goldman projects EBIT margins of 11% in 2016, according to the April 1 note.

Hexcel  
Hexcel  

Shares of Hexcel (HXL - Get Report) are up 3.6% this month.

Hexcel, which makes advanced composites for the aerospace, space and defense and industrial sectors, reported quarterly profit of $56 million, or 59 cents a share, above Wall Street expectations. Sales rose 5.5% to $497.7 million for the March ending quarter. The company also raised its quarterly dividend by 10% to 11 cents a share. 

Goldman Sachs has a neutral rating and a $46 target price on Hexcel.

Hexcel is projected to have sales growth of 8%, according to Thomson Reuters. Goldman projects EBIT margin of 19% in 2016, according to Goldman.

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