Opinions
Stephen Weiss, Founder, Short Hills Capital Partners
Goldman Sachs
GS-N
BUY
Sep 11, 2024
Stock price when the opinion was issued
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Likes them both, as well as others in the sector. Don't look at the chart and not buy because it's gone up so much and you've "missed" the price move. Instead, look at the fundamentals -- have earnings, cashflow, revenue growth kept up with the price? Or, look to how it's trading against historical valuations.
He added not so long ago. Excellent opportunity, mainly on capital markets side. Good economy, reduced regulation. Unlike other areas of the market, valuations in financials are not extended, so there's opportunity.
At 13X earnings, considering earnings, capital markets outlook and interest rate forecasts, we think it still looks good.
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Likes it. Financials should be one of the leaders coming out of the current environment, as they were before the recent volatility. Down ~22% from recent highs last month on recession concerns. 200-day MA seems to be support where you can buy. As Buffett says, "Be greedy when others are fearful."
One of the leaders in investment banking and wealth management. Will benefit from deregulation and potential increase of M&A activity.
Of the big banks, they are the most levered to investment banking, including IPOs. He bought it expecting an uptick in IPOs under Trump, but his tariffs have temporarily derailed that. The IPO revival should happen if tariffs don't return. This pulled back hard since mid-February because of those tariffs, down 35%.
He bought more GS this week. Their credit cards have been their major overhang; they announced they will get out of the consumer business and are close to a deal with Barclays. The charge-offs could be 10%, twice the industry norm. And who will take the Apple credit cards off their hands? These won't impact GS long term. They did give a target of raising $225 billion in third-party assets to support their wealth management business, which they've already surpassed. Their pipeline has increased a lot, too. Trading revenues are -10%, but last year's comps were so great. Is trading a little over 11x PE 2025.