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Goldman Sachs Group Inc. (GS)

- NYSE
  • Sep. 9, 2014, 12:24 PM
    • The Fed intends to impose a capital surcharge on banks tougher than the international standard, according to Fed Governor Daniel Tarullo's prepared remarks for the Senate Banking Committee. Those banks with heavier reliance on short-term funding like overnight loans - i.e. Goldman Sachs (GS -1%) and Morgan Stanley (MS -1.8%) - will likely face even more rigorous requirements.
    • Officials haven't yet decided on a number, but reportedly are considering as much as 200 basis points more than the top range of 2.5% of risk-weighted assets agreed to by international regulators.
    • What's not yet clear is who would need to raise capital to meet the new, tougher standard.
    • Citigroup (C -1%), Bank of America (BAC -0.6%), JPMorgan (JPM -1.3%), Wells Fargo (WFC -0.4%), State Street (STT -1.1%), Bank of New York Mellon (BK -0.9%)
    • ETFs: XLF, FAS, FAZ, UYG, VFH, IYF, IAI, SEF, IYG, FXO, FNCL, FINU, KCE, RWW, RYF, KBWC, FINZ
    | 25 Comments
  • Jul. 29, 2014, 10:42 AM
    | 3 Comments
  • Jul. 15, 2014, 11:32 AM
    • Goldman Sachs (GS +0.6%) continues to see a big boost in CEO confidence and thus M&A activity, says bank CFO Harvey Schwartz on the earnings call. "This traditionally coincides with increased client activity and economic sentiment."
    • Along with the opportunity from M&A, Goldman sees better business coming from clients' increasing worry over higher interest rates, along with customer focus on outsourcing portfolio management functions to save money and return to their core competencies.
    • Goldman is well off of its session highs following a major earnings beat. A closer look shows a major jump in Investing and Lending net revenue to $2.07B thanks to net gains of $1.25B primarily from private equity investments "driven by company-specific events."
    • “It’s like owning an orchard,” says Brad Hintz. “There are periods of time where you’re just sitting there looking at trees, and then you’re just up to your knees in apples. We happen to be at the point where the harvest is coming in.”
    | Comment!
  • Jul. 1, 2014, 3:29 PM
    • Significant fixed-income cuts could be coming at Goldman Sachs (GS -0.3%) reports Charlie Gasparino, amid the continuing slowdown in business, with details maybe coming when the bank reports Q2 earnings on July 15.
    • Both CEO Lloyd Blankfein and President Gary Cohn come from fixed-income and they've been reluctant to give up on the business, but the full effect of Dodd-Frank regulations are beginning to kick in, and a big change in the bank's business model could be necessary.
    • During the internet boom, Goldman sniffed around E*Trade (ETFC +2.8%) and Schwb (SCHW +1.9%), and some bankers, according to Gasparino, say Goldman may need to take another look at purchasing an online brokerage name.
    | 10 Comments
  • May 5, 2014, 10:20 AM
    • A check of the global banks finds the group pacing market declines in morning action after Friday night's warning on Q2 trading revenue from JPMorgan (JPM -2.2%).
    • Nomura's Steven Chubak is first out with lower JPMorgan earnings estimates.
    • Jim Cramer sums up sentiment: "This has been a house of pain. You can't own these right now. You just can't."
    • Morgan Stanley (MS -1.9%), Goldman Sachs (GS -1.5%), Citigroup (C -1.2%), and Bank of America (BAC -1%), Deutsche Bank (DB -1.2%). Far less trading dependent than the other Too Big Too Fails is Wells Fargo (WFC -0.2%).
    • The iShares DJ U.S. Broker-Dealer ETF (IAI -1.2%)
    • XLF -0.7%, KBE -0.8%
    • ETFs: XLF, FAS, FAZ, UYG, VFH, IYF, IAI, SEF, IYG, PFI, FXO, FNCL, KBWB, FINU, KCE, RWW, RYF, PSCF, FINZ, KBWC
    | 16 Comments
  • Apr. 17, 2014, 12:15 PM
    • On the surface, Morgan Stanley's (MS +3.5%) Q1 results appear far better than those of Goldman Sachs (GS +0.6%), with FICC revenues up 9% Y/Y vs. a decline at Goldman. But Oppenheimer's Chris Kotowski notes Morgan had an especially easy comparison since 2013 Q1 was particularly weak. "Nonetheless, it is always nice to see year-over-year growth, and Morgan Stanley's is the best we have seen so far."
    • Kotwoski also takes note of return on tangible common equity - 11.1% at Goldman vs. 10.9% at Morgan. Despite the lower ROE, Morgan trades for 10.3x 2015 estimates vs. 9.4x for Goldman. Investors may want to have to take a harder look at which one to buy.
    | 1 Comment
  • Apr. 17, 2014, 8:05 AM
    • EPS of $4.02 compares with $4.29 a year ago and $4.60 in Q4. Revenue of $9.33B falls from $10.09B. Annualized ROE of 10.9% in Q1.
    • Investment banking revenue of $1.78B up 13% Y/Y, with financial advisory revenue of $682M up 41%, equity underwriting revenue of $437M up12%, debt underwriting of $660M down 5%.
    • Institutional client services revenue of $4.446B down 13% Y/Y, with FICC revenue of $2.85B down 11%, not terribly out of line with dim expectations, but Morgan Stanley and BofA managed to report gains in this segment (Citi and JPMorgan had declines). Given the fixed to shrinking pie size, Goldman lost some share during the Q.
    • Investing & Lending revenue of $1.529B downb 26% Y/Y. Investment management revenue of $1.152B up 9%.
    • Operating expenses of $6.31B off 6% from a year ago, with compensation and benefits expense of $4.01B down 8%. Compensation and benefits as a percentage of revenue of 43% is flat. Total headcount down 1% during the quarter.
    • CC at 9:30 ET
    • Press release, Q1 results
    • GS +2% premarket
    | 3 Comments
  • Mar. 5, 2014, 3:42 PM
    • Buying the rumor? On a flattish day for the major averages, the Too Big To Fail banks are ignoring a continued slowdown in markets revenue this quarter, and instead partying ahead of what may be the imminent release of the Fed's stress test results (perhaps Friday). About one week later will be CCAR results at which the Fed gives the thumbs up or thumbs down on the banks' capital return plans.
    • Word is the tests are tougher this year, but bank capital levels are also improved.
    • Leading today is Bank of America (BAC +3%) - now within about one percent of a 4-year high. Others: Morgan Stanley (MS +2.8%), Goldman Sachs (GS +1.8%), Ciitgroup (C +1%), JPMorgan (JPM +1.5%), and Wells Fargo (WFC +0.6%).
    • Also subject to the stress tests are a number of regional lenders, not to mention credit card players - they're mixed in today's action.
    • Related ETFs: XLF, FAS, FAZ, UYG, KRE, VFH, KBE, IYF, IAI, IAT, SEF, IYG, FXO, PFI, KBWB, RKH, QABA, FNCL, FINU, KCE, KRU, RWW, KBWR, RYF, PSCF, KRS, FINZ, KBWC
    | 8 Comments
  • Jan. 15, 2014, 9:03 AM
    • "We still have not approached the true earnings potential of Bank of America (BAC)," says CEO Brian Moynihan, leading off the earnings call. The bank reported EPS of $0.29, beating estimates for $0.26, but adjusting for DVA, litigation, and the artificially low tax rate brings core EPS up to $0.42, notes Hedgeye's Josh Steiner.
    • CC webcast and presentation slides
    • Declining to answer a question about the Fed stress tests and BofA's capital return plans (will the nominal $0.01 dividend be hiked this year), CFO Bruce Thompson notes the bank's Tier 1 common capital ratio is around 9%, higher than the proposed 8.5% minimum which doesn't take effect until 2019.
    • The bank cut 5,826 jobs in Q4 - with the cuts coming in branches and mortgage servicing/origination.
    • Goldman Sachs (GS) and Morgan Stanley (MS) investors take note: BofA's FICC revenue of $2.1B jumped 16% Y/Y. JPMorgan yesterday reported a 1% Y/Y gain vs. expectations for an 11% decline. The Street expects Goldman to report a 23% decline (after Q3's 44% tumble) and Morgan Stanley an 8% increase. Is a positive surprise looming?
    • BAC +2.9% premarket to $17.25, the highest price in nearly 4 years.
    | Comment!
  • Jan. 2, 2014, 10:47 AM
    • Trading at 1.2x tangible book value, the stocks of Goldman Sachs (GS +0.1%) and Morgan Stanley (MS -0.7%) look to have mostly priced in management's ability to drive returns above cost of capital, says analyst Keith Horowitz, who nevertheless raises Goldman's PT to $195 and Morgan's to $35.
    • Bank of America's (BAC +2.2%) new price target of $19 "reflects a cost of equity more in line with history and no longer impacted by legacy issues."
    • Lazard (LAZ -0.5%) - which had a big 2013 - may do little more than tread water this year, says Horowitz, as weak M&A activity weighs on earnings.
    • Previous coverage of CIti's BofA upgrade
    | 1 Comment
  • Dec. 5, 2013, 12:01 PM
    • The Too Big To Fail banks lead to the downside amid a report the set-to-be-voted on Volcker rule will not contain language allowing portfolio hedging - trades supposedly designed to protect against losses in a broad portfolio of assets.
    • Banks can thank JPMorgan's (JPM -1.7%) London Whale fiasco for this as the Whale's trades were ostensibly set up for this portfolio hedging, but ended up costing the bank $6B.
    • The move is a big blow to the banks which had sent their big lobbying guns in to try and prevent the disallowing of this practice. Banks often hedge to offset risks from trading with clients, but often there is no great hedge, and this is where portfolio hedging comes in ... or used to.
    • "Volcker has morphed a bit, thanks to the Whale," says UBS' Brennan Hawken. "Now a big component of it has become about hedging. What can you hedge, and what can't you? It's really unclear." The CFTC and SEC are each set to vote on the rule on Dec. 10.
    • Citigroup (C -1.9%), Bank of America (BAC -1.2%), Goldman Sachs (GS -1%), Morgan Stanley (MS -2.2%).
    | 47 Comments
  • Oct. 17, 2013, 10:01 AM
    • "Franchise feels good, we just had a tough quarter," says Goldman Sachs (GS -2.4%) CFO Harvey Schwartz on the company earnings call (still in Q&A, listen live here). Everyone knew trading revenue was set to take a hit at the big banks this quarter, but Goldman's 44% decline was especially bad (Citi fell 26%, BofA 20%, JPM 8%). Why?
    • Schwartz suggests it's the mix of clients: Goldman has more asset managers who pulled back from trading amid the volatility, while the others cater more to hedge funds who are less likely to shy away from action. "I don't want to sound defensive ... not a good quarter for us."
    • Earlier: Q3 results.
    | 1 Comment
  • Oct. 17, 2013, 7:55 AM
    • A big miss on revenue has Goldman (GSoff 3% in early trades after the release of Q3 earnings, even as the bank tries to soften things with a 10% dividend boost. Blankfein: "The Q3 results reflected a period of slow client activity ... Still, we saw various signs that our clients are prepared to act on significant transactions and we believe that the firm is well positioned to help our clients accomplish their objectives."
    • Investment banking revenue of $1.17B is roughly unchanged from a year ago, with advisory (M&A) business way down and underwriting (IPO) business way up. The backlog "increased significantly" from Q2.
    • Institutional client services revenue of $2.86B fell 32% Y/Y, led by a 44% decline in FICC revenue to $1.25B (even worse than already-weak Street estimates). "FICC operated in a challenging environment, which was characterized by economic uncertainty, difficult market-making conditions in certain businesses and lower levels of activity." Indeed.
    • Ouch! Compensation expense of $2.38B fell 35% from a year ago. The ratio of compensation and benefits to total revenue is 41% over the year's first nine months vs. 44% a year ago.
    • Q3 results, press release.
    • Conference call at 9:30 ET.
    | 1 Comment
  • Sep. 23, 2013, 7:36 AM
    • Citigroup (Cslips 1% in the premarket after its weekend "pre-announcement" of a big fall in FICC revenue in Q3. The bank had been hoping to get bailed out by a big September, but the Fed's non-taper last week squelched the chance of major portfolio moves by clients.
    • Anybody paying attention surely noticed last week's evaporation of profit at Jefferies (now owned by Leucadia) as fixed-income trading revenue essentially disappeared.
    • Deutshce Bank (DB) is expected to soon be out with a warning similar to Citibank's. Barclays (BCS) and Credit Suisse (CS) have already waved their own red flags over this issue.
    • Not yet heard from are Goldman (GS), Morgan Stanley (MS), JPMorgan (JPM), and BofA (BAC), but Goldman is also off nearly 1% premarket.
    | 3 Comments
  • Jul. 29, 2013, 8:49 AM
    • Intuitive Surgical (ISRG +3%) raises its buyback program by $779M to $1.5B, which includes $721M not yet realized.
    • As part of the altered program, Intuitive is purchasing $500M of stock from Goldman Sachs (GS), the majority of which will be retired by the end of October. (PR)
    | Comment!
  • Jun. 21, 2013, 11:54 AM
    A check of the TBTFs finds Wells Fargo (WFC +0.9%) the only gainer amidst a floated report the Fed and FDIC are weighing a doubling in the "simple leverage ratio." Wells already exceeds the 6% proposed ratio, but presumably BofA (BAC -2.8%), JPMorgan (JPM -1.3%), Citigroup (C -4%), Goldman (GS -1.7%), and Morgan Stanley (MS -3.1%) would need to halt or pare back dividends and buybacks should the rule be implemented. The financial SPDR (XLF -1.4%).
    | 8 Comments
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Company Description
Goldman Sachs Group Inc is a investment banking, securities and investment management firm. Its segments include Investment Banking, Trading and Principal Investments, Asset Management and Securities Services.