There's a lot to be worried about in the stock market. The bull market is in its sixth year as earnings growth taper and the global economy slows.
But even if the markets and economy as a whole were to turn, there will continue to be growth stories here and there that'll deliver no matter what.
These are the secular growth stories.
On Tuesday, Morgan Stanley released its annual list of secular growth stocks.
"To build this Secular Growth Stocks list, we started by screening Morgan Stanley’s North America coverage for stocks rated Overweight or Equal-weight, where our analysts forecast 2014-17 growth of at least 15% for EPS and at least 10% for revenue," Morgan Stanley explained. "We then we asked our analysts to identify the stocks from this universe for which they had high conviction in the company’s 'secular growth' characteristics, regardless of the economic environment, including some stocks that exhibited strong growth but fell slightly outside the original screen’s parameters (for example, several of the names had negative base-year EPS)."
We've summarized Morgan Stanley's list here, including projected compound annual growth in earnings per share from 2014 and 2017, the projected 2016 price-to-earnings (P/E) ratio, and the price-to-earnings-to-growth (PEG) ratio. Growth stocks with lower PEGs are generally considered cheaper.
You'll not only find some well-known names on the list —including Google, Facebook, and Apple — but also a smaller companies that Morgan Stanley says are under the radar.
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Abiomed
Ticker: ABMD
Projected EPS growth: 86%
Projected 2016 P/E: 110.6
PEG ratio: 1.3
Comment: "While the bulk of recent growth has been increased utilization at existing sites, management sees a clear runway as interventional cardiologists shift focus from single-vessel stenting to treatment of complex high-risk patients (CHIP) with triple-vessel disease and poor ejection fractions who are risky candidates for surgery," said analyst David Lewis
Alexion Pharmaceuticals
Ticker: ALXN
Projected EPS growth: 19%
Projected 2016 P/E: 29.9
PEG ratio: 1.6
Comment: "Alexion's growth continues to be driven by its key drug, Soliris, expected to read-out label expansion studies in two additional rare diseases in 2016, which could add an additional ~$1B to top-line sales," said analyst Matthew Harrison.
American Tower Corp.
Ticker: AMT
Projected EPS growth: 16%
Projected 2016 P/E: 33.6
PEG ratio: 2.1
Comment: "We favor the fundamentals of the tower business model, the secular growth story around mobile data, and high visibility," said analyst Simon Flannery. "We believe the set-up is attractive into 2016 in the United States, and trends look to be stabilizing in certain key markets, such as India and Mexico."
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