Thursday, November 24, 2005

Hank's House: Goldman Sachs

With rates (finally) pausing and the Fed jihad nearing a close, it should surprise no one that the financials are rallying.

Goldman Sachs hit 5 year high on Wednesday.

This is clearly a stock you want to own.

Goldman is still trading at a below-industry multiple.

Goldman still generates decent ROE considering the industry it is in.

GS continues to underwrite new issues for America's hottest companies, like last week's explosive Under-Armor IPO.

GS is getting more publicity than ever before -- CNBC commentator James Cramer is a Goldman alum and isn't ashamed to remind his 400,000 + viewers at least once a night.

Goldman's footprints are in every solid financial service space conceivable.

GS is run by Hank Paulsen, whose picture should be in the dictionary next to the word "execution."

We have a $185 price target on shares of Goldman.

A little high? You bet.

When the Street wakes up and realizes that GS is worth 20 X earnings and at least 3.5 or even 4 X book, GS will be valued barely where it was when it went public in 1999.

That's gold, Jerry, gold!

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