One of the most popular axioms on Wall Street is: The trend is your friend.
In a recent report, UBS identified “Seven Megatrends of the Future” and ranked their impact on individual industries.
“The Megatrends are multi-year themes that we expect to continue to widen the performance gap between the disrupters and the disrupted,” said a group of strategists at the firm.
Here’s a closer look at the industries UBS thinks their seven megatrends benefit and suppress.
Today, the strategists are searching for stocks that still offer heaps of potential despite a less-than stellar industry outlook. And although some businesses are clearly more advantageously positioned, it doesn’t mean that stocks in a less favorable standing are lost causes.
“Many are solid businesses that can compound earnings even without the tailwinds of the Seven Megatrends behind them,” they said. “These are the stocks that often trade cheaper to fundamentals because investors’ focus on top-down analysis may mean they are ‘painted by the same broad brush’ as their weaker peers in a generally compromised sector.”
Listed below are 18 stocks that the strategists think look enticing despite headwinds. They’re listed in ascending order of potential upside to UBS’ price target.