Jul
23
Written by:
Steve Patterson
7/23/2009 10:46 PM
Why I Purchased Goldman Sachs (GS) Friday
Last Friday I purchased Goldman Sachs Group (GS) as the markets quickly recovered from month lows and broke to the upside as earnings season got underway. This was after GS reported great earnings that beat expectations by 40% with analysts increasing their expectations for future quarters and the year.
Markets Jump
What a difference two weeks make? Prior to the start of earnings season the indexes were slowly falling to new month lows and signaling a sell. But a number of companies have beaten their expectations including Goldman Sachs (GS), Johnson & Johnson (JNJ), JPMorgan Chase (JPM), and International Business Machines (IBM) giving the bulls reason to buy.
Earnings Expectations
The case for Goldman Sachs is fairly strong. For the quarter ending September 2009 analyst have increased their expectations for the company’s earnings from $2.08 a share to $3.30 a share. This is an increase of 59%. The stock itself has moved from $125 to $165 a share which does represent an increase of 32% but not equal to the earnings increase.
The Trade
The trailing price to earnings ratio is currently 37 with the forward price to earnings at 10. Earnings increases could reach 82% for the current quarter and 183% for the next quarter. These increases would make the P/E conservative. Analysts have an average price target of 173.5 for the year. With the markets moving higher and Goldman Sachs being one of the strongest in it’s industry, holding GS until the end of the earnings season is a trade that I wanted to make.
© 2009 FastSwings.com
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18 comment(s) so far...
Re: Why I Purchased Goldman Sachs (GS) Friday
I have fixed the commenting which was not working for a couple of days. Sorry for the inconvenience.
By Steve on
7/24/2009 11:11 AM
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GS
Good buy indeed!
But I think it was a little of a gamble, really.
By Art Shred on
7/24/2009 9:41 PM
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Re: Why I Purchased Goldman Sachs (GS) Friday
The stock has moved 5% higher in the past week. I believe this trade is solid for a 10% gain in a month in my opinion.
By Steve on
7/24/2009 10:10 PM
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Re: Why I Purchased Goldman Sachs (GS) Friday
20/20 being hind site. looks rough for any who bought anything
By Jan on
7/27/2009 12:51 PM
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Re: Why I Purchased Goldman Sachs (GS) Friday
Goldman sees potential short covering if GE delivers a high quality 2Q beat, but maintains their Neutral rating and $16 price target on uncertainty due to U.S. financial regulatory reform which could require GE to spin or divest parts of GE Capital.
By hospedagem on
7/28/2009 4:07 PM
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Re: Why I Purchased Goldman Sachs (GS) Friday
hind site is another thing. sorry for all that bought them
By east london lettings on
7/29/2009 7:01 AM
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Re: Why I Purchased Goldman Sachs (GS) Friday
yes i totally agree
By rental flats london on
7/29/2009 8:06 AM
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Re: Why I Purchased Goldman Sachs (GS) Friday
this is bad.. soory for all those who bought into it.
By make-up artist on
7/30/2009 4:22 AM
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Re: Why I Purchased Goldman Sachs (GS) Friday
There has been a pause in the markets but there is still a good amount of earnings season remaining for an additional rally.
By Steve on
7/30/2009 8:43 AM
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Re: Why I Purchased Goldman Sachs (GS) Friday
totally agree on this!.. good post
By burlesque performer on
7/31/2009 5:18 AM
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Re: Why I Purchased Goldman Sachs (GS) Friday
I second Obama's comments recently when he said its the start of the end of recession.. i think market will grow from now onwards.. we have already started seeing improvements in the global economy.
By fast food coupons on
8/1/2009 1:11 AM
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Re: Why I Purchased Goldman Sachs (GS) Friday
Thanks for the info- it turns out Microsoft's bing really is making an impact, it seems to me your blog is getting a lot of search engine traffic from bing- have you found this to be the case?
By music videos on
8/4/2009 3:25 AM
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Re: Why I Purchased Goldman Sachs (GS) Friday
Is it true that investment bankers from Goldman Sachs make over $20 million dollars in bonuses alone? How?
By Ps2 cheats on
8/20/2009 10:54 AM
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Re: Why I Purchased Goldman Sachs (GS) Friday
That's great, I never thought about Why I Purchased Goldman Sachs (GS) Friday like that before.
By Site Tool on
9/8/2009 4:43 AM
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Re: Why I Purchased Goldman Sachs (GS) Friday
Goldman has again become the poster boy of investment banking.
Thanks,
Steve
By Annuities on
10/14/2009 6:53 AM
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Credit Risk Evaluation
Thats great, I never knew before this blog.
By Credit Risk Evaluation on
11/21/2009 5:16 AM
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business performance analysis
Great ....You have beautifully presented your thought in this blog post.
By business performance analysis on
11/21/2009 5:17 AM
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financial industry analysis
That is really very good article. I am glad to know. Thanks!
By financial industry analysis on
1/27/2010 1:53 AM
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