Retail Investors Least Favorite Stocks Revealed by Goldman Sachs

Goldman Sachs' trading desk analyzed the influence of retail investors on the market and identified stocks they dislike the most. These include companies such as FedEx, Domino's Pizza, and Costco. Retail investors tend to avoid stocks with high valuations, low dividends, and complex business models.

Goldman Sachs' trading desk has analyzed the influence of retail investors on the market and identified stocks that they tend to avoid. These include companies such as FedEx, Domino's Pizza, and Costco. Retail investors often shun stocks with high valuations, low dividends, and complex business models.

According to Goldman Sachs analysts Gail Hafif, Brian Garrett, and Lee Coppersmith, retail investors now account for a significant portion of U.S. equity trading. On peak days, retail flows have accounted for over 28% of S&P 500 trading [1]. Retail traders have shown a strong preference for technology and consumer discretionary stocks, with nearly one-fifth of trading in the tech-focused XLK (NYSEARCA:XLK) ETF being retail-driven [1]. Conversely, they exhibit little interest in utilities and real estate.

FedEx (FDX), Domino's Pizza (DPZ), and Costco (COST) are among the stocks that retail investors tend to avoid. These companies have high valuations, low dividends, and complex business models, which may deter retail investors. FedEx, for instance, has a high P/E ratio and a complex business model involving logistics and express delivery services. Domino's Pizza, while profitable, has a relatively low dividend yield and a high valuation. Costco, despite its strong brand and membership model, has a complex business structure that may be challenging for retail investors to understand.

Goldman Sachs analysts note that retail investors' activity is closely linked to market direction and can influence market swings [1]. Their buying and selling imbalances often track index price action, reinforcing their role in driving market movements. This trend underscores the importance of understanding retail investor sentiment when analyzing market dynamics.

In conclusion, the influence of retail investors on the market is significant, with their preferences and behaviors shaping market trends. Stocks with high valuations, low dividends, and complex business models tend to be avoided by retail investors. Understanding this dynamic can provide valuable insights for investors and financial professionals.

References:
[1] https://seekingalpha.com/news/4486328-retail-traders-are-now-critical-force-in-u-s-equity-markets-goldman-sachs
[2] https://finance.yahoo.com/news/nvidia-95-portfolio-invested-2-075500473.html
[3] https://www.investing.com/news/analyst-ratings/riskified-stock-holds-steady-as-goldman-sachs-reiterates-sell-rating-93CH-4197749