While this investment bank saw its earnings slip by 11%, due to a decline in bond trading, it still managed to beat estimates, earning $4.02 per share vs. the $3.49 Wall Street analysts expected.
Goldman Sachs (GS)
from Heartland Adviser
One of the stocks on our Buy List that needs to be highlighted is Goldman Sachs (GS). Goldman Sachs is a leader in the investment banking industry. Before the banking crisis in 2008, it used to have significant competition from companies like Lehman Brothers and Bear Stearns. Lehman Brothers went bankrupt while Bear Stearns is no longer an independent company. Goldman Sachs, although bruised, did survive the banking crisis and it has little competition left.
In 2007, before the banking crisis, Goldman Sachs was selling at over $250 per share. Today it is trading in the $150 range. Warren Buffett’s company, Berkshire Hathaway, is one of its major stockholders, owning 8.1% of the shares. Buffett bought most of this stock during the banking crisis. He had bought large number of shares because he saw its potential, which I also see for this company.
The somewhat controversial CEO of the company, Lloyd Blankfein, owns 1.9% of the shares of Goldman Sachs. With such a high financial stake in the company, Blankfein is definitely invested for the long haul. Goldman Sachs was founded in 1869, and has survived this long because it knows how to effectively change with the social and financial needs of the times. Their dividend is 1.4% so this is not a stock for the income-oriented investor.
Russ Kaplan, Heartland Adviser, www.russkaplaninvestments.com, 402-614-1321, April 18, 2014