Try This Winning Stock Picking Strategy

So you want to buy winning stocks? Well keep it simple and just focus on stocks with high revenue growth.

Second quarter earnings season showed that companies capable of expanding sales despite challenges in the economy will outperform peers, according to research from Goldman Sachs. Meanwhile, these stocks are trading at just historical average valuations.

With margins coming down due to the stagnant economy, revenue growth will be needed for higher earnings. Only a few companies were able to show growth. In fact, S&P 500 sales grew only 3 percent in 2Q, the lowest rate since 2009. 2013 doesn't look much better, with Goldman expecting S&P 500 sales growth of just 5 percent.

Only 16 percent of S&P 500 companies are forecast to grow sales by more than 10% in 2013, and revenue surprises were rare in 2Q. But upside was easily seen in these winners as "80% of stocks that beat revenue estimates in 2Q beat the market during the next week."

Goldman is recommending a basket of US stocks with the highest Revenue Growth (available as (GSTHREVG) on Bloomberg).

Some stocks in this basket include:

In IT: salesforce.com (NYSE: CRM) (27% projected '13 sales growth), Google (Nasdaq: GOOG) (27% projected '13 sales growth);

In Financials: Morgan Stanley (NYSE: MS) (13% projected '13 sales growth);

In Energy: Cabot (NYSE: COG) (40% projected '13 sales growth);

In Health Care: Watson Pharmaceuticals (NYSE: WPI) (46% projected '13 sales growth);

In Consumer Discretionary: Amazon.com (Nasdaq: AMZN) (28% projected '13 sales growth);

In Industrials: United Tech (NYSE: UTX) (15% projected '13 sales growth);

In Materials: Freeport-McMoRan (NYSE: FCX) (19% projected '13 sales growth);

In Utilities: Duke Energy (NYSE: DUK) (20% projected '13 sales growth);

In Telecom: Crown Castle (NYSE: CCI) (7% projected '13 sales growth)

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