Goldman Sachs is out with a fresh list of “shared favorite” stocks among the two major kinds of institutional stock pickers. Investors may be hunting for bargains after the major U.S. indexes have continued to rally this year, with the Dow Jones Industrial Average notching a record close as recently as Friday after Federal Reserve Chair Jerome Powell signaled a potential rate cut ahead. According to David Kostin, chief U.S. equity strategist at Goldman Sachs, some investment opportunities can be found in Goldman’s shared favorites list. These stocks are loved by both mutual funds and hedge funds. This is unusual as the two types of funds tend to have very different equity positions given their unique investment strategies, fees, regulations and target investors. Just seven stocks overlap the constituents of the firm’s Hedge Fund Very Important Position (GSTHHVIIP) and Mutual Fund Overweight Positions Basket (GSTHMFOW), Kostin said. The group has returned 20% year to date, significantly outperforming the S & P 500 ‘s 9.8% gain this year, the strategist said. And this isn’t a new trend, as Goldman’s shared favorites have outperformed the broad-market index since 2013 and delivered an average annual return of 16%, he said. Take a look at the stocks that fit the bill: Streaming giant Spotify is a “shared favorite.” Goldman has a buy rating on the stock, which has rallied about 57% this year. Spotify shares took a tumble over the past month, however, after the company missed Wall Street’s second-quarter revenue expectations and gave weak guidance for the current quarter. Spotify is eyeing growth opportunities, with a target of 1 billion users, and plans to raise prices as it invests in new services and features, the Financial Times reported on Sunday. Power and thermal management company Vertiv also made the cut. Goldman analyst Mark Delaney recently lifted his price target on Vertiv to $122 from $106 to reflect ongoing strength in the data center market. To be sure, his new target suggests 3% potential downside for the stock. Shares of Vertiv are up about 10% this year, buoyed by ongoing investments in AI infrastructure. Financials Visa and Mastercard , which were previously included in Kostin’s “shared favorites” in a Feb. 2024 note, remain in the group. The stocks have gained about 11% and 13% year to date, respectively.
