To The Moon

——"A list of high gross profit and nice fundamental stocks"

Recently, $Goldman Sachs(GS)$ equity investment strategists stressed the importance of pricing power for companies given a four-decade high in inflation and rising commodities prices.

They stressed earnings risks are to the downside for the rest of the year and management commentary will be particularly important this earnings season given current uncertainty.

What kind of information shall investors pay attention to?

First, outlook for economic growth and consumer demand.

The possibility of a recession has been a common theme in recent client discussions, and the yield curve is implying a one in three probability of a recession in 2023. However, our economists believe a recession is far from inevitable due partly to healthy household and corporate balance sheets .. We will monitor management commentary for broader signs of declining consumer demand.

Second, inflation and profit margins.

Pricing power will become increasingly important in the face of continued inflation and cost pressures. In order to assess the sustainability of margins, we will monitor the ability of firms to pass increased costs through to consumers.

Third, business exposure to geopolitical risks and investment plans to improve resiliency.

Pandemic lockdowns and the Russian invasion of Ukraine have reinforced the need for firms to evaluate their global exposures. Some firms have taken actions to strengthen their supply chain resilience .. Furthermore, firms that have recently halted business in Russia will likely need to take impairment charges to account for asset write downs

Below, we conclude a list that GS recommend in each sector with the best and worst pricing power, aka, with high and stable gross margins.

We'll see if they outperform after the earning season.

$(GOOGL)$ $(CABO)$ $(XLY)$ $(TPR)$ $(PVH)$ $(LULU)$ $(ORLY)$ $(TNL)$ $(SKX)$ $(NKE)$ $(AAP)$ $(HOG)$ $(BURL)$ $(LKQ)$ $(XLP)$ $(PM)$ $(KO)$ $(XLE)$ $(BKR)$ $(SLB)$ $(HAL)$ $(XLV)$ $(EW)$ $(ALGN)$ $(JNJ)$ $(ZTS)$ $(COO)$ $(WAT)$ $(MTD)$ $(XLI)$ $(CSGP)$ $(NDSN)$ $(TRU)$ $(GGG)$ $(VRSK)$ $(SNA)$ $(SPGI)$ $(ROL)$ $(CTAS)$ $(NVT)$ $(DOV)$ $(CW)$ $(FBHS)$ $(DCI)$ $(ITT)$ $(TT)$ $(XLK)$ $(DLB)$ $(CDNS)$ $(ADBE)$ $(SNPS)$ $(ORCL)$ $(FTNT)$ $(WDAY)$ $(PAYX)$ $(CSCO)$ $(MPWR)$ $(XLB)$ $(CTVA)$