Goldman Sachs (GS)

(A Top Pick Dec 19/16. Up 9%.) He likes the US financials, but has moved away from this in favour of Morgan Stanley (MS-N). Didn't feel it was executing as well as it should have been. Trading volumes have been low, and he wanted to move more towards the retail opportunity in addition to capital markets.

(A Top Pick Aug 8/16. Up 47%.) All global investment banks are benefiting as interest rates start to rise. This one has done what almost no one else has done, which is not reducing exposure to the riskier trading parts of the business. Their global footprint is almost 2^nd to none today. They have good exposure in Europe, whose economy is slowly recovering.

The whole banking sector is going to do better. It is a great place to hide. It has been a tough road because regulators have not exited the space yet. Once they go these things could have another leg on them. He has BAC-N.

A name that bodes very well in terms of their offering. Trading at about 1.23 X Price to Book, not a bad valuation relative to the rest of the street. Stock has been flattening a little more recently. A name that would be on his radar.

He likes this. It is not expensive and pays a decent dividend. A couple of things have happened that has hurt. Other companies cut back on fixed income, currency and commodity (FCC) side of the business because it is a very highly intensive capital business from a regulatory point of view. Goldman decided not to do that as much. They are still #1 in cash equities, etc.

(A Top Pick Aug 8/16. Up 34.44%.) This has something unique. While almost every other major global investment bank has reduced its trading exposure, this one hasn’t. Therefore, competition has fallen off dramatically. Margins in trading and related businesses, are expanding dramatically. The only major US global bank that has fewer shares outstanding than they did before the financial crisis. This is still a buy.

(A Top Pick June 9/17. Down 1.22%.) This is taking it on the chin a little as the 10-year treasury moved back down to under 2.1%, but that is the low point of 2017. These things are cyclical and eventually interest rates will pop up, and a company like this will follow suit. It will rebound once financial stocks start to move up again.

He likes this company. They had a very bad quarter with trading revenue, which you don’t usually see. He would be a buyer, and you can Buy a Call option if you want to take a leveraged position.

Just reported record earnings and profits. They have a strong capital management team. We have gone through 8 years of a financial mania, conglomeration and low interest rates. At some point that is going to reverse itself and this leading investment bank is going to help the companies get themselves out of trouble that they have put themselves in. Dividend yield of 1.4%. (Analysts’ price target is $241.50.)

This had a bad quarter and the stock fell 5%-6%. If anybody can make money in the financial world, these guys do it all the time. Balance sheet is twice as strong as it was at the time of the financial crisis. This is a bank that has the least exposure and problems with narrowing credit spreads. It has the best return on equity and the best growth opportunities. Trading at 11X earnings and has good growth prospects. Dividend yield of 1.3%. (Analysts’ price target is $250.00.)

This has been hit hard recently and he is taking advantage of this being down a good 14% from its 52-week high. Feels it is the strongest Dow stock today. There is the promise of financial services as interest rates move up. Dividend yield of 1.4%. (Analysts’ price target is $250.)

Financials got rushed. Trading volume this quarter has been lack luster in this sector. Interest rates continue to dip lower. We have not yet had a reduction in regulation as expected after Trump’s election.

He likes a lot of these investment banks and a lot of the US financials. When you own a name like this, you are getting some US institutional and banking business. It is very highly levered to yields moving higher. This looks like it is bouncing off the 200-day moving average. A lot of the US financials have come down and are starting to look very, very attractive.

In their last quarter, they had some trouble with their fixed income and currency side, and he views that as a “one off”. The stock was down 5%. With the proposed US deregulations and tax reform, that would be even more positive for them. There is lots of M&A going on. This is trading at 12X earnings, compared to the market which is at 17X. Feels they will generate growth of 12% for the next 3 years. Dividend yield of 1.4%. (Analysts’ price target is $251.)

(A Top Pick March 2/16. Up 30.36%.) There is still more to go on this. There is a dearth of US companies right now. The number of listed US companies is shrinking year by year for the last 10 years. Expects that this is going to go up towards its high of the year of about $250.