According to a New York Times report, The Goldman Sachs Group Inc.’s (GS) partners decreased their stake in the company to about 10% from 11.2%. The reduction in stake includes selling approximately $108 million of shares in the recent months.
Goldman’s 483 partners sold 655,120 shares at an average price of $162 in the months of December and January, according to the report. This compares favorably with the sale of shares worth $75.5 million in the 60 days before the end of November.
Estimate Revision Trends
Goldman is expected to release its first-quarter 2011 earnings on April 19, 2011. Over the last 30 days, 3 of the 17 analysts covering Goldman have lowered their estimates for the first quarter of 2011, while no upward revision was witnessed. Currently, the Zacks Consensus Estimate for the first quarter is operating earnings of $3.93 per share, a decrease of 29.67% from the year-ago quarter. Further, over the last 30 days, operating earnings estimates for first quarter 2011 fell significantly from $4.19 per share to $3.93.
Fundamentally, we expect Goldman to benefit from its well managed global franchise, strong capital base and industry leading position in trading and asset management. Though the company recorded lower equity trading and overall revenue decline in the last quarter, its prudent business model and strong fundamentals are expected to deliver better earnings in the upcoming quarters.
Earlier in the month, the asset-management unit of Goldman has agreed to acquire India’s Benchmark Asset Management Co. (BAM), a provider of large exchange-traded funds (ETFs). The acquisition is meant to expand in Asia’s third-largest economy and follows Goldman’s strategic asset-management partnership in South Korea. Further, the completion of acquisition will bring more businesses for the company, which will be reflected in the coming quarters.
Goldman currently retains its Zacks #3 Rank, which translates into a short-term ‘Hold’ rating. Also, considering the fundamentals, we maintain a long-term “Neutral” recommendation on the stock. Goldman’s closest competitor – Morgan Stanley (MS), retains a Zacks #5 Rank (a short-term ‘Underperform’ rating).
GOLDMAN SACHS (GS): Free Stock Analysis Report
MORGAN STANLEY (MS): Free Stock Analysis Report
Zacks Investment Research
