With equities climbing to record highs, some traders may be looking for shorting opportunities. Goldman Sachs is out with a morning note listing 19 companies that it believes have downside potential.
Here's what Goldman's Chief U.S. Equity Strategist David Kostin and his team found:
"In this report we highlight possible shorts based on stock valuation, investor positioning, and the fundamental views of our analysts. ... High growth, high valuation stocks have outperformed YTD as economic growth faltered in 1Q 2015, but this trend should reverse as macro data rebound in 2Q. Using our new framework, we identify the micro-driven S&P 500 stocks most likely to move independently from the market, presenting the most alpha opportunity for stock pickers. Among these, we highlight 19 stocks rated Sell by Goldman Sachs Equity Research with price targets at least 10 percentage points below consensus...We also exclude stocks with dividend yields above 5% or that our analysts have categorized as most likely (more than 30% probability) to experience M&A activity during the next 12 months."