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Morgan Stanley has released a list of stocks its analysts think could outperform markets regardless of what may happen to upset economic conditions.
These “secular growth stocks,” as the bank calls its eighth annual report, out Wednesday, are companies in which the bank’s analyst are bullish and see an upside beyond the usual business cycle.
“While our US Equity Strategy team has remained positive on an equity market they believe is ‘Classic Late Cycle,’ for some long-term investors, it may make sense to focus not on the cycle, but through the cycle,” the bank said. “Indeed, Morgan Stanley Research has long focused on identifying multi-year secular trends — powerful long-term drivers that can reshape or disrupt economies, sectors, and business models.”
To compile the list, Morgan Stanley screened the thousands of stocks generated revenue growth for the past three years. It then focused on those rated overweight or equal weight by its analysts to find which had a three-year compound-annual-growth-rate forecast of at least 15% for earnings per share and 10% for revenue.
Here are the 16 stocks that could see revenue with a CAGR of more than 20% through 2019:
16. CyrusOne
Ticker: CONE
Sector: Telecom Services
Market cap: $5.65 billion
Revenue CAGR (2016-2019e): 20%
EPS CAGR (2016-2019e): 20%
Year-to-date stock performance: +27.5%
Source: Morgan Stanley
Get real-time CONE charts here>>
15. Nvidia
Ticker: NVDA
Sector: Technology
Market cap: $118.14 billion
Revenue CAGR (2016-2019e): 20%
EPS CAGR (2016-2019e): 23%
Year-to-date stock performance: +91.73%
Source: Morgan Stanley
Get real-time NVDA charts here>>
14. Veeva Systems
Ticker: VEEV
Sector: Technology
Market cap: $8.58 billion
Revenue CAGR (2016-2019e): 20%
EPS CAGR (2016-2019e): 18%
Year-to-date stock performance: +44.14%
Source: Morgan Stanley
Get real-time VEEV charts here>>
13. Salesforce
Ticker: CRM
Sector: Technology
Market cap: $71.08 billion
Revenue CAGR (2016-2019e): 21%
EPS CAGR (2016-2019e): 24%
Year-to-date stock performance: +41.72%
Source: Morgan Stanley
Get real-time CRM charts here>>
12. Align Technologies
Ticker: ALGN
Sector: Healthcare
Market cap: $16.10 billion
Revenue CAGR (2016-2019e): 24%
EPS CAGR (2016-2019e): 35%
Year-to-date stock performance: +122.83%
Source: Morgan Stanley
Get real-time ALGN charts here>>
11. Vertex Pharmaceuticals
Ticker: VRTX
Sector: Healthcare
Market cap: $16.10 billion
Revenue CAGR (2016-2019e): 24%
EPS CAGR (2016-2019e): 35%
Year-to-date stock performance: +122.83%
Source: Morgan Stanley
Get real-time VRTX charts here>>
10. Palo Alto Networks
Ticker: PANW
Sector: Technology
Market cap: $13.74 billion
Revenue CAGR (2016-2019e): 25%
EPS CAGR (2016-2019e): 33%
Year-to-date stock performance: +17.23%
Source: Morgan Stanley
Get real-time PANW charts here>>
9. Amazon
Ticker: AMZN
Sector: Technology
Market cap: $472.17 billion
Revenue CAGR (2016-2019e): 26%
EPS CAGR (2016-2019e): 31%
Year-to-date stock performance: +38.21%
Source: Morgan Stanley
Get real-time AMZN charts here>>
8. Netflix
Ticker: NFLX
Sector: Technology
Market cap: $84.02 billion
Revenue CAGR (2016-2019e): 26%
EPS CAGR (2016-2019e): 117%
Year-to-date stock performance: 50.53%
Source: Morgan Stanley
Get real-time NFLX charts here>>
7. Workday
Ticker: WDAY
Sector: Technology
Market cap: $22.58 billion
Revenue CAGR (2016-2019e): 27%
EPS CAGR (2016-2019e): 108%
Year-to-date stock performance: +56.43%
Source: Morgan Stanley
Get real-time WDAY charts here>>
6. TPI Composites
Ticker: TPIC
Sector: Consumer Discretionary/Industrials
Market cap: $794 million
Revenue CAGR (2016-2019e): 29%
EPS CAGR (2016-2019e): 46%
Year-to-date stock performance: +48.54%
Source: Morgan Stanley
Get real-time TPIC charts here>>
5. Proofpoint
Ticker: PFPT
Sector: Technology
Market cap: $4.27 million
Revenue CAGR (2016-2019e): 30%
EPS CAGR (2016-2019e): 70%
Year-to-date stock performance: +23.73%
Source: Morgan Stanley
Get real-time PFPT charts here>>
4. ServiceNow
Ticker: NOW
Sector: Technology
Market cap: $21.31 billion
Revenue CAGR (2016-2019e): 30%
EPS CAGR (2016-2019e): 50%
Year-to-date stock performance: +66.72%
Source: Morgan Stanley
Get real-time NOW charts here>>
3. Atlassian
Ticker: TEAM
Sector: Technology
Market cap: $11.53 billion
Revenue CAGR (2016-2019e): 33%
EPS CAGR (2016-2019e): 20%
Year-to-date stock performance: +94.96%
Source: Morgan Stanley
Get real-time TEAM charts here>>
2. Facebook
Ticker: FB
Sector: Technology
Market cap: $507.85 billion
Revenue CAGR (2016-2019e): 33%
EPS CAGR (2016-2019e): 35%
Year-to-date stock performance: +44.62%
Source: Morgan Stanley
Get real-time FB charts here>>
1. Tesla
Ticker: TSLA
Sector: Consumer Discretionary/Industrials
Market cap: $57.593 billion
Revenue CAGR (2016-2019e): 48%
EPS CAGR (2016-2019e): Not applicable
Year-to-date stock performance: +51.9%
Source: Morgan Stanley
Get real-time TSLA charts here>>