Goldman a contrarian buy?

The average rating on Goldman Sachs (GS +1.4%) of 3.21 (where a sell-side Buy gets a 5, a Hold gets a 3, and a Sell gets a 1), the lowest since Bloomberg started tracking the data in 2006. The 3.21 rating puts Goldman 68th among 83 financial stocks in the S&P 500. For the entire S&P 500, Goldman is ranked 440th.

This comes, of course, as the decline in trading revenue at investment banks picks up steam, with Goldman more reliant on this activity than its competitors. "What drives activity in our business is volatility.," said Goldman president Gary Cohn at an investor conference recently. "If markets never move or don’t move, our clients really don’t need to transact.”

Priced in? Goldman is down 4.9% YTD vs. Morgan Stanley's 3.8% gain and JPMorgan's 1.8% drop. On a year-over-year basis, Goldman is ahead just 2.7% vs. Morgan Stanley +24.1%, JPMorgan +6.6%, and the XLF +15%.

Previously: Green shoots at Goldman

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Comments (1)
  • convoluted
    , contributor
    Comments (2503) | Send Message
    Reminds me of IBM a couple of years back-IBM traded between 120/130 before the fed breakout. I traded calls/puts. Doing the same with GS, plus using stock as well. I've been buying in upper 150's and selling at 164ish. The recent uptick was a bit of a surprise, but all financials got an algo pop recently. Not doing anything at this price-but still 'relatively cheap.' FAS recently dropped below 90, and now back pushing 100. But, market seems to be in 'range' at the moment-just wandering around, moving to and fro to the beat of the day. Just another day on planet Earth.
    18 Jun 2014, 11:15 AM Reply Like
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