Are Goldman Sachs And Facebook Poised For A Rebound?

Includes: FB, GS, JPM
by: Marc Lichtenfeld

As you may have heard, golfer Tiger Woods has won his second tournament in three months, after having not won an event since before his personal life went over a cliff in 2009. We'll have to see if the old Tiger is back, but regardless, it's a strong comeback for an athlete and a man who seemed completely lost just a short time ago.

Stocks can act the same way. Sometimes a stock is enormously popular, only to crash and burn. And if you can find the ones that will rise from the ashes, there is a lot of money to be made.

Let's look at two stocks that have had a rough go of it over the past few months and years, but seem poised to rebound.

Goldman Sachs (NYSE:GS): Goldman's stock is a disaster, trading at about one-third of its all-time high of $250 back in 2007. Main Street despises Wall Street right now, and those feelings will likely only increase as we head into a particularly nasty election where the Obama campaign will attempt to position Mitt Romney as everything negative about the industry.

Although Goldman's reputation doesn't shine as brightly as it once did, it is still one of -- if not the -- 800-pound gorillas in the business. With JPMorgan Chase's (NYSE:JPM) CEO Jamie Dimon seeing his formerly beloved status evaporate due to uncontrolled trading losses, Goldman is still arguably the king of Wall Street. But its stock isn't trading like that, though. Near its lowest level in three years, the stock is trading at just 7.6 times this year's expected earnings.

In 2013, earnings per share are projected to grow 11%, increasing to 12% over the next five years. On a trailing basis, Goldman is surprisingly trading well below its peers at 13.3 times earnings vs. the industry average of 18.5 times.

There are all kinds of regulatory reforms aimed at Wall Street firms, which make them out of favor with investors. But nobody has done it better than Goldman for years, and when the group comes back into favor, Goldman Sachs will likely lead the way.

Facebook (NASDAQ:FB): Facebook doesn't have a long history as a publicly traded company, but could anything be more out of favor? On Monday, an analyst was on CNBC saying that Facebook isn't going to be around in five years.

I'm going to bet he's wrong. Facebook might not have lived up to the hype that was generated in order to get the masses to pump up the stock price, but that doesn't mean there isn't a real business here that can grow by leaps and bounds. Facebook has more of its users' personal information than any company on the planet. As it begins to figure out how to monetize that information, revenue and earnings will grow significantly.

Also, keep in mind that Internet users spend three times as much time on Facebook than on any other website. And don't underestimate Mark Zuckerberg. Just because he's soft-spoken and a little awkward, you shouldn't mistake him for being complacent. He is one of the most driven CEOs around. He wants to be the next Bill Gates. He has the intelligence and the product to get him there.

We're still in the early stages with Facebook, but I think long-term investors will be just fine with this stock.

It's hard to know who is disliked more, Tiger Woods or Goldman Sachs and Facebook. But Tiger appears to be back, and I expect Goldman and Facebook to help investors be at the top of their game in the near future as well.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.