Goldman Sachs Group Inc.GS

Morningstar Rating

Stock Research and Analysis

by Michael Wong, CPA

Goldman Sachs has a reputation for being one of the savviest business dealers on Wall Street. However, the credit markets--through the company's credit default swap spreads--and the equity markets--through the stock price--voiced concerns about the Read more

Bulls Say

Even if its structure has changed, Goldman still has the same capable management and employees that enabled it to outperform in recent years.

Increased returns on assets may offset the decrease in leverage.

Several of the company's primary U.S.-based competitors have been forced to restructure, and this could give Goldman an opportunity to gain market share. Read more

Bears Say

The change to a bank holding company could put restrictions on Goldman's proprietary trading and investment activities, which have been a main contributor to earnings in recent years.

All else equal, reduced leverage reduces returns to shareholders.

Goldman remains highly leveraged and still has risky securities on its balance sheet.

A severe financial shock could still turn market sentiment against the company.

Proprietary trading and principal investing has as much potential for losses as gains if risk-management efforts fail. Read more

Strategy

Goldman seeks to earn appropriate risk-adjusted returns on its capital. Instead of operating solely as a financial intermediary, the firm commits its own capital to facilitate customer transactions and Read more

Management

Lloyd Blankfein has been chairman and CEO since Henry Paulson left to become U.S. Treasury Secretary in 2006. Blankfein has held various positions at the firm for more than a decade, from co-head of the currency and commodities division in 1994 to president Read more

Profile

Goldman Sachs is a global investment banking firm whose activities are organized into investment banking, trading and principal investments, and asset-management and securities Read more

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