NEW YORK ( TheStreet) -- Goldman Sachs (GS - Get Report) shares have been driving higher into 2013 on optimism of a recovering economy, investor inflows into stock markets and expectations that the standalone investment bank is well positioned for an eventual merger and acquisition wave.
While fourth quarter earnings are likely to show Goldman Sachs at the head of the Wall Street pack when it comes to underwriting and trading revenue, the bank still has room to prove to investors it stands apart from peers such as Morgan Stanley (MS - Get Report).
Notably, Goldman is one of just a handful of banks that's been able to deploy excess capital to reduce its share count in recent years, helping to return its earnings per share to pre-crisis levels, even if other metrics like absolute revenue and return on equity remain well below 2007 levels.
As Goldman focuses on right sizing its expense and balance sheet, investors should pay attention to capital returns -- and share buybacks in particular -- as a key part of the bank's share performance in 2013 given uncertainty surrounding trading and investment banking revenue."
Check Out Our Best Services for Investors
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Model portfolio
- Stocks trading below $10
- Intraday trade alerts