GOLDMAN SACHS: Buy these 13 stocks for their explosive sales growth as market-wide profits dry up

Heading into this past earnings season, analyst expectations were extremely lofty. And then something surprising happened: companies beat them anyway.

But the surprises didn’t end there. Even as corporations handily exceeded forecasts, investors failed to reward them with stock gains commensurate to their outperformance, according to Goldman Sachs. To make matters even dicier, firms that missed earnings were punished to a greater extent than usual.

To say these were tough conditions is an understatement, especially considering S&P 500 earnings-per-share grew by 23% during the quarter, the most since 2011.

So what gives? Is the traditional way for traders to play earnings season outdated? Goldman has some ideas.

The firm argues the lack of share price follow-through stems from investors thinking — perhaps correctly — that profit growth has peaked for the cycle, leaving nowhere to go but down.

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