These stellar stocks are very popular with passive funds right now. Goldman Sachs highlights its top passive stock picks here. Even active investors can gain from passive fund picks says the firm’s Arjun Menon: “Similar to sector allocations, we encourage active managers to assess their factor exposures in light of the potential boost or headwinds from passive inflows.” He notes that the most overweight passive fund stocks (+38%) have outperformed the Russell 3000 (+20%) by more than 15 percentage points during the past 12 months.
So here we take a better look at four solid stocks from GS’s list worth keeping an eye on. As you will see we use further analysis from the Street to back Goldman’s recommendations:
VMWare (VMW)
VMware, Inc. is the leading provider of virtualization solutions for businesses. This includes data center consolidation and remote management.
“We’re adding VMware to our top picks” cheered top Oppenheimer analyst Ittai Kidron (Track Record & Ratings) at the end of August. This comes with a Buy rating and $180 price target (15% upside potential) up from $170 previously.
Following the company’s VMWorld conference, Kidron feels more confident in his bullish thesis. “With stock trading at ~15x CY19/FCF estimates, we believe there’s still skepticism with respect to VMware’s competitive positioning and ability to grow in the face of a cloud transition. Our checks/meetings indicate otherwise. We’re bullish.”
Indeed, his customer survey points to both 1) strong spending intentions and 2) new product uptake ahead. In fact, ~77% of VMWare customers revealed plans to increase spending over the next 12 months vs none to reduce.
Net net: “We’re positive on VMware’s technology and execution, and believe it is now well positioned to be a leader in enabling hybrid cloud deployments.” See what other Top Analysts are saying about VMW.
