The GRANOLAS Group: A European Counterpart to the Tech Giants

Introduction

In addition to the well-known tech giants known as the “Magnificent Seven,” there is another group of European companies that have been keeping pace with them. This group is known as GRANOLAS, a term coined by Goldman Sachs in 2020. While the Magnificent Seven may have captured most of the attention, GRANOLAS has proven to be equally impressive, with significantly lower risk.

The GRANOLAS Group

The GRANOLAS group consists of the following leading European companies:

• GSK
• Roche
• ASML
• Nestlé
• Novartis
• Novo Nordisk
• L’Oréal
• LVMH
• AstraZeneca
• SAP
• Sanofi

These companies have demonstrated remarkable performance when compared to the Magnificent Seven in terms of total returns since January 2021. The GRANOLAS group has achieved a solid 63% return, which is on par with the likes of Amazon.com, Apple, Alphabet, Meta Platforms, Microsoft, Nvidia, and Tesla. What’s even more impressive is that this has been achieved with only half the volatility experienced since 2018.

Competitive Advantages

One key advantage is that GRANOLAS stocks are much more affordable than those of the Magnificent Seven, trading at a price-to-earnings ratio of 20 compared to 30. However, it’s worth noting that they still have a higher valuation compared to the broader European market.

Another strength of the GRANOLAS group lies in their consistent growth and predictability. These stocks offer a secure investment opportunity that appeals to investors. Guillaume Jaisson and his team of strategists at Goldman Sachs believe that these stocks trade at a premium due to their strong potential for growth. In fact, they recommend owning GRANOLAS stocks when global GDP growth is projected to be below 3% over the next five years – an outlook that aligns with the bank’s expectations.

Fourth Quarter Highlights

The GRANOLAS group has recently concluded a successful fourth quarter reporting season. Novo Nordisk made significant strides with their weight-loss drugs, demonstrating exceptional performance. ASML also experienced a surge in demand for their microchip-equipment making machines. However, L’Oréal faced some challenges in China, resulting in disappointment for the company.

Investing in GRANOLAS

Given the remarkable track record and growth potential of GRANOLAS, it is no wonder that investors are interested in this group. However, unlike many other investment opportunities offered through exchange-traded funds, Goldman Sachs has not yet created a dedicated fund for trading on the GRANOLAS theme. This means that investors interested in exposure to the GRANOLAS group would need to purchase each stock individually.