GOLDMAN SACHS: Buy these 17 'superstar' stocks, which dominate sales in their industries and have been crushing the market
- The number of publicly listed companies peaked in the mid-1990s, giving rise to giant corporations that dominate their industries' sales.
- Goldman Sachs says these "superstars" have achieved higher profitability and outperformed their peers over the past three years.
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These days, it seems like every private company that can file for an initial public offering is choosing to go that route.
But the broader reality is that the number of publicly listed companies peaked in the mid-1990s and net business formation has slowed in every decade since the 1980s. Both trends have led to the emergence of corporate juggernauts that dominate their industries.
Goldman Sachs analysts have identified a handful of these companies and dubbed them "superstars." Those firms have used their competitive advantage to earn higher margins and outperformance in the stock market during the past three years. They also garner the vast share of their industry's sales, and have translated this market share to higher profitability.
"The market positioning of superstar firms often allows for greater bargaining power over consumers and workers and higher profitability," said David Kostin, the chief US equity strategist, in a recent note to clients. "Superstar firms have been one driver of the explosion in US corporate margins post-crisis."
Listed below are companies on the S&P Total Market Index that earn more than 20% of their respective industry's US sales. They're listed in ascending order of their share, with the most dominant company owning a whopping 88% of its industry's sales.
Get the latest Goldman Sachs stock price here.