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Goldman Sachs (GS,$GS) Beats Expectations but Profits Down Due to Dividend, ValuEngine Models Remain Neutral on the Finance Giant

|Includes:Goldman Sachs Group Inc. (GS)
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April 19, 2011 Seeking Alpha Readers should check out our Seeking Alpha VE Investment App HERE

 

Earnings Season Continues

Goldman Sachs (GS,$GS) Beats Expectations but Profits Down Due to Dividend, ValuEngine Models Remain Neutral on the Finance Giant

  Goldman Sachs is a global investment banking and securities firm, providing a full range of investing, advisory and financing services worldwide to a substantial and diversified client base, which includes corporations, financial institutions, governments, and high net worth individuals.

  Infamously branded a "great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money," by Rolling Stone Magazine's Matt Taibbi, Goldman seems to have weathered the financial crisis better than its competitors and would have made significant profits last quarter had it not been paying off obligations to prominent investors like Warren Buffett--whose Berkshire Hathaway provided a major infusion of cash to the bank at the depths of the housing market blow up.  The preferred dividend totaled $1.64 billion and held the company back for the quarter.  Goldman also lost the golden touch it possessed in its trading operations a few quarters ago--when it never suffered a single day loss--and saw revenues fall more from 24-28% in its fixed income, currency, commodities, and equities trading arms.

  ValuEngine has issued a HOLD recommendation for Goldman Sachs on Apr. 19, 2011. Based on the information we have gathered and our resulting research, we feel that Goldman Sachs has the probability to ROUGHLY MATCH average market performance for the next year. The company exhibits ATTRACTIVE company size and P/E ratio, but UNATTRACTIVE momentum and price/sales ratio.

  Based on available data as of Apr. 19, 2011, we believe that GS should be trading at $157.59. This makes GS 2.42% undervalued. Fair Value indicates what we believe the stock should be trading at today if the stock market were perfectly efficient and everything traded at its true worth. For GS, we base this on actual earnings per share (NYSEARCA:EPS) for the previous four quarters of $13.51, forecasted EPS for the next four quarters of $17.75, and correlations to the 30- year Treasury bond yield of 4.45%.

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Market Indices Data
  Latest Change YTD
Dow Jones
12,239.80 38.18 5.72%
NASDAQ Composite
2,737.59 2.21 3.19%
Russell 2000
820.62 -0.89 4.72%
S&P 500
1,308.87 3.73 4.07%

 

ValuEngine Market Overview
Summary of VE Stock Universe
Stocks Undervalued
44.5%
Stocks Overvalued
55.5%
Stocks Undervalued by 20%
18.02%
Stocks Overvalued by 20%
24.85%
ValuEngine Sector Overview
Sector Change MTD YTD Valuation Last 12-MReturn P/E Ratio
Oils-Energy -1.88% -4.74% 8.21% 17.15% overvalued 34.74% 46.76
Multi-Sector Conglomerates -1.21% -2.12% 2.67% 12.19% overvalued 22.29% 29.64
Transportation -1.68% -3.77% -2.41% 10.09% overvalued 11.03% 21.32
Utilities -1.31% -1.31% 3.59% 9.24% overvalued 15.17% 21.28
Consumer Staples -0.59% -0.90% -1.27% 8.41% overvalued 12.44% 19.25
Business Services -1.23% -1.69% 3.99% 6.94% overvalued 10.12% 50.22
Basic Materials -1.71% -3.44% -2.40% 6.82% overvalued 42.36% 25.06
Industrial Products -1.27% -3.91% 3.25% 5.99% overvalued 17.88% 29.62
Aerospace -1.48% -3.85% 11.62% 5.68% overvalued 15.09% 18.89
Retail-Wholesale -0.82% -0.78% 4.61% 5.39% overvalued 14.54% 28.87
Finance -1.36% -2.52% 0.83% 5.03% overvalued 3.77% 25.63
Computer and Technology -1.56% -2.48% 9.11% 5.03% overvalued 22.36% 44.64
Construction -1.14% -3.84% -1.57% 3.20% overvalued 0.20% 33.55
Consumer Discretionary -1.08% -0.93% 4.50% 3.07% overvalued 9.85% 32.73
Auto-Tires-Trucks -1.58% -6.42% -8.58% 2.20% overvalued 25.65% 19.60
Medical -1.17% -0.40% 11.71% 1.22% overvalued 10.42% 37.72

 

   

 

 

 

 
 
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Stocks: GS