Goldman Sachs told clients on Monday to avoid U.S. stocks with the highest exposure to China and buy domestically focused companies instead.
"China's equity market roller coaster has clouded the global economic growth outlook," wrote Goldman's David Kostin. "We prefer stocks with high domestic sales."
Kostin notes that since Chinese stocks entered a bear market a month ago analysts have lowered EPS estimates of S&P 500 members with the highest revenues in China by 15 percent, whereas they've cut estimates for the whole S&P 500 by just 8 percent since then. Accordingly, the median return of the 20 U.S. stocks with the most China exposure is negative 6 percent so far in 2015, according to the investment bank.
Here are the China plays Goldman says investors should avoid and what they should buy instead.