Goldman's 2009 Stock Winners Keep Winning

BOSTON (TheStreet) -- Some of Goldman Sachs'(GS) most important stock picks last quarter have fallen flat.

But several of its so-called conviction-buy recommendations from last year -- many made in the dark days of the stock-market rout before the rebound that began in March -- have outperformed stock-market benchmarks many times over. Some may even rise further, according to Goldman's analysts.

Stocks on Goldman's "conviction buy" list "represent investment recommendations focused on either the size of the potential return or the likelihood of the realization of the return," according to the New York-based bank. Some of Goldman's second-quarter "conviction buy" recommendations are losing investors money as investors fear a double-dip recession, stagnant jobs market and a ballooning deficit.

The following three stocks were added to Goldman's "conviction buy" list in 2009. The bank continues to recommend owning the shares.

3. JPMorgan Chase(JPM) last week posted second-quarter earnings of $1.09 a share, dwarfing the consensus estimate of 70 cents. The global bank's results included a 36-cent benefit from a reduction in loan-loss reserves and a 14-cent charge related to a U.K. bonus tax.

Goldman's Call: Goldman added JPMorgan Chase to its "conviction buy" list Jan. 26, 2009, and currently has a 12-month stock-price target of $54. Analyst Richard Ramsden wrote in a July 15 research note that JPMorgan's credit was "improving faster than anticipated" in the second quarter, although he noted that "pre-provision earnings were down 10% with trading revenues down by a third and net interest income under pressure."

Stock Performance Since Recommendation: 58.2% (July 21 close)

S&P 500 Return Since Recommendation: 28.6%

Potential Return: Based on Ramsden's price target of $54, JPMorgan Chase shares could still reward investors with a 39% gain.