by winston » Tue Dec 27, 2016 10:56 am
not vested
Best Dow Jones Stocks to Buy: Goldman Sachs (GS)
Much of the rally in the Dow Jones has come from gains at Goldman Sachs Group Inc (NYSE:GS). The vampire squid has been surging over the last few months on the back of the so-called Trump Bump. But, the real win is that GS could keep those gains going in the year ahead.
There are two big reasons why.
First, Goldman has shifted much of its focus away from proprietary trading. Historically, stock, currency and derivatives trading has made up the bulk of GS’s revenue. However regulation and low interest rates have limited the effect of these businesses.
Well, with Trump in charge, it’s now game-on for those businesses as he has vowed to cancel/veto plenty of regulations in the financial industry. Janet Yellen and company have also helped with the latest interest rate boost.
Secondly, Goldman has moved back heavily into good old fashioned investment banking, as its trading arm was hindered under regulations. M&A advising, asset management and commercial lending have all increased at Goldman.
These activities are only expected to rise over the next year as the economy strengthens. And, Goldman will make plenty of fees from all that book running, interest rate spreads and management fees.
This has only boosted quarterly and yearly earnings estimates for the Dow Jones stock. Meanwhile, GS stock shares remain cheap at a forward P/E of only 13.
For investors, this means that Goldman is one of the best Dow Jones stocks to buy in terms of value.
Source: The Trading Report
It's all about "how much you made when you were right" & "how little you lost when you were wrong"