Would You Own?
Here on WSO we have spent a whole lot of ink either praising Goldman Sachs hoping to work there, or bashing it for its many well-documented publicity stunts. But I haven't seen anyone really ask the most important question here...can it make us money?
Forgetting all the headlines and all the reprehensible behavior of its executives for a second, how do we evaluate Goldman's stock (NYSE:)? Here are some basics:
* Closed yesterday at around $140
* 52-week range of $129-175
* PE 15.42
* EPS 9.13
* Dividend of 1%
I had an investment banking professor in school who loved to give out "life lessons." One of them was, "If you see Goldman stock under $100, BUY IT. If you don't, you'll kick yourself when it triples in value a year or two out." I'm inclined to believe the guy. My thinking is that, financial stocks being as volatile as they are, if there's one group that's going to get its stock back up again, it's Lloyd and company. It only went public in 1999, and at the height of the bull market it almost hit $250.
After hitting a low of just over $50 in mid-October 2009, so far Goldman stock has been on a pretty steady climb, although it does seem to have stalled of late:
How do we evaluate this one, monkeys? Do we buy and hold? Do we short it in light of its most recent hiccups (see Eddie's post below this one)? Is it overpriced? Do we wait for a better price? Or do we just leave it all alone, thinking there's a better deal out there in this industry?