This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Goldman Sachs: Dow Winner

The KBW Bank Index (I:BKX) rose over 1% to close at 64.16, with all but two of the 24 index components rising for the session.

Shares of Citigroup (C - Get Report) were up 2% to close at $51.09. Citigroup's shares have returned 29% this year. The strong economic news out of Asia is especially important for the company, which reported that 20% of its second-quarter revenue and 22% of its earnings came from its businesses in Asia.

Goldman Sachs

Goldman's shares have returned 31% this year, following a 43% return during 2012. The shares trade for 1.2 times their reported June 30 tangible book value of $141.62, and for 10.6 times the consensus 2014 earnings estimate of $15.54 a share, among analysts polled by Thomson Reuters. The consensus 2015 EPS estimate is $16.05.

Another major near-term event for Goldman is the stake Warren Buffet-led Berkshire Hathaway's (BRK.B) will take in the investment bank's common shares in October.

When Berkshire made a $5 billion preferred investment in Goldman in 2008, Berkshire was granted 43.5 million warrants to purchase Goldman common shares with a strike price of $115. Rather than exercise the option, Berkshire agreed earlier this year to accept common shares in Goldman equal to the profit on the warrants, based on Goldman's average share price during the 10 trading days prior to Oct. 1. Berkshire will end up holding roughly 3% of Goldman's common shares, valued at about $2.2 billion.

Goldman reported that during the first half of 2013 it repurchased 20.6 million shares for $3.12 billion. But investors may be concerned over a possible curtailment of the investment bank's return of capital to investors over coming years. Citigroup analyst Keith Horowitz estimates that if federal regulators accept the Basel Committee's proposed changes in large banks' supplementary Tier 1 leverage calculations, Goldman's June 30 supplementary Basel III Tier 1 leverage ratio would drop to 3.9% a reported 4.8%.

Under rules proposed in July by federal regulators, the largest U.S. banks -- including Goldman -- will be required to raise their supplementary Basel III Tier 1 leverage ratios to at least 5.0% to be considered well-capitalized.

GS Chart GS data by YCharts

Interested in more on Goldman Sachs? See TheStreet Ratings' report card for this stock.

RELATED STORIES:






-- Written by Philip van Doorn in Jupiter, Fla.

>Contact by Email.

Philip W. van Doorn is a member of TheStreet's banking and finance team, commenting on industry and regulatory trends. He previously served as the senior analyst for TheStreet.com Ratings, responsible for assigning financial strength ratings to banks and savings and loan institutions. Mr. van Doorn previously served as a loan operations officer at Riverside National Bank in Fort Pierce, Fla., and as a credit analyst at the Federal Home Loan Bank of New York, where he monitored banks in New York, New Jersey and Puerto Rico. Mr. van Doorn has additional experience in the mutual fund and computer software industries. He holds a bachelor of science in business administration from Long Island University.
2 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG
BAC $16.36 0.00%
C $53.28 0.00%
GS $187.75 0.00%
MS $34.05 0.00%
AAPL $113.29 0.00%

Markets

Chart of I:DJI
DOW 16,643.01 -11.76 -0.07%
S&P 500 1,988.87 +1.21 0.06%
NASDAQ 4,828.3250 +15.6170 0.32%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs