Earnings Season: Goldman Sachs Group, Inc. (Public, NYSE:GS)
It is earnings season once again and in honor of this highly anticipated event we will be profiling one stock each day that investors will we watching once the quarterly earnings results are released. With the highs we’ve reached to date, market reaction to these earnings results will be imperative to determine whether the uptrend will continue or if a correction is set to occur. Please join us over the next few weeks while we give you the information you need before the companies report.
The Stock
Goldman Sachs Group, Inc. (Public, NYSE:GS) is set to report earnings tomorrow morning and investors will anxiously await for responses to recent charges pressed against the company by the SEC. The market is expecting an EPS of $4.01 versus the $3.39 in the year ago period.
This report will not go into the impact that the charges brought against the company will have on the stock price of this company as this remains up for debate. The report will detail the reaction and seasonal tendencies based on past periods, as well as the technical and fundamental analysis at current levels.
The stock continues to retain a “buy” rating amongst analysts, however the risk involved in doing so may deter many investors from doing so. Fundamental ratios remain strong, however in the mid-term the stock is fairly valued at around levels of $158. However, in the long-term, once the economic recovery is further along, some value in the stock may be present with targets reaching into the $200’s, or at least 25% above current levels. Stability is the key to achieve this and we’re certainly not there yet.
The technicals are dismal and send a clear warning to investors to stay away until the stock has clearly bottomed out. The stock has shown a history in the last 5 years of rallying following these Q1 earnings to the tune of 5% to 10%, mind you this is somewhat skewed with last year being the first that Q1 earnings were reported in April. Prior earnings for this equivalent quarter have been presented in March, which is the time of year that seasonal influences just begin kicking into gear within the market. April represents the period that seasonal influences begin to top.
The stock has been trading relatively flat since October, and the value given back on Friday merely represents the extraordinary gains received since the February lows of this year that sent the market rallying to gains in 33 out of 46 sessions between February 8 and April 15.
Chart Courtesy of StockCharts.com
The Clock
Seasonally the stock does not perform well over the current timeframe. Losses reach all the way to 5% on average between now and May. Strength in the market value of this company is becoming increasingly hard to find, unless you’re willing to gamble on the expectation of a rebound.
| Goldman Sachs Group Inc. (GS) 160.7 | -23.57 (-12.79%) | |||||||||||||||||||||
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| Seasonality Analysis | ||||||||||||||||||||||
| Analysis has revealed that with a buy date of October 10 and a sell date of September 14, investors have benefited from a total return of 457.78% over the last 10 years. This scenario has shown positive results in 7 of those periods. | ||||||||||||||||||||||
| Conversely, the best return over the maximum number of positive periods reveals a buy date of September 16 and a sell date of May 5, producing a total return over the same 10-year range of 241.87% with positive results in 9 of those periods. | ||||||||||||||||||||||
| The buy and hold return for the past 10 years was 88.58%. | ||||||||||||||||||||||
| Technical Analysis | ||||||||||||||||||||||
| Support 2 | Support 1 | Pivot Point | Resistance1 | Resistance2 | The Numbers | |||||||||||||||||
| 136.69 | 148.70 | 167.55 | 179.56 | 198.41 | Most Recent Close: | 160.70 | ||||||||||||||||
| Support/Resistance Analys | Broke Lwr Support (2) | 52-Week High: | 193.60 | |||||||||||||||||||
| MACD Analysis: | Positive/Decreasing | 52-Week Low: | 113.38 | |||||||||||||||||||
| MACD vs. Signal: | Bearish MA Crossover | Fib. Retracement: | ~ 61.8% | |||||||||||||||||||
| RSI Analysis: | Bearish Centerline Crossov | 50-Day MA: | 166.96 | |||||||||||||||||||
| Stochastic (Fast) Analysis: | Increasingly Oversold | 200-Day MA: | 167.41 | |||||||||||||||||||
| 50 vs 200-Day MA Analysis: | 50-day Below 200-Day MA | High Critical Level: | 180.63 | |||||||||||||||||||
| Year over Year Trend: | Strongly Gaining | Low Critical Value: | 168.63 | |||||||||||||||||||
| Critical Level Analysis: | Broke Below Previous Tren | Average Monthly Gain: | 3.4% | |||||||||||||||||||
| MFI Analysis | Bearish Centerline Crossov | Technical Rating: | 2 | |||||||||||||||||||
| Candlestick Analysis | Bearish | On a scale of 1 to 10, the higher the rating, the more appealing the investment is to buy at current levels. | ||||||||||||||||||||
| Situational Analysis | ||||||||||||||||||||||
| Past Year | Advancing Sessions % | Return % | 10-Year Average | Advancing Sessions % | Return % | |||||||||||||||||
| Apr 18 thru May 18 | 57.1 | 18.7 | Apr 18 thru May 18 | 44.2 | -1.3 | |||||||||||||||||
| Best Return: 18.7% – Sell May 18 | Best Return: 4.8% – Sell Apr 30 | |||||||||||||||||||||
| Apr 18 thru Jul 17 | 50.8 | 30.4 | Apr 18 thru Jul 17 | 45.3 | -0.1 | |||||||||||||||||
| Best Return: 30.4% – Sell Jul 16 | Best Return: 9% – Sell May 30 | |||||||||||||||||||||
| Apr 18 thru Oct 15 | 54 | 57.2 | Apr 18 thru Oct 15 | 49.2 | 3 | |||||||||||||||||
| Best Return: 60.2% – Sell Oct 14 | Best Return: 17.8% – Sell Jul 31 | |||||||||||||||||||||
| Following Q1 Earnings Releases – Last 5 Periods | During Equivalent Periods of Economic Recovery where Unemployment has Peaked | |||||||||||||||||||||
| 5-Period Average | Advancing Sessions % | Return % | 1-Period | Advancing Sessions % | Return % | |||||||||||||||||
| After 30 Days | 48.5 | 4.7 | After 90 Days | 60.3 | 8.9 | |||||||||||||||||
| Best Return: 9.9% – After 17 Days on Average | Best Return: 9.9% – After 67 Days | |||||||||||||||||||||
| After 60 Days | 48.3 | 9.8 | After 180 Days | 56.5 | 20.3 | |||||||||||||||||
| Best Return: 16.7% – After 43 Days on Average | Best Return: 22% – After 164 Days | |||||||||||||||||||||
| After 90 Days | 47.4 | 7 | After 360 Days | 51.4 | 4.1 | |||||||||||||||||
| Best Return: 17.1% – After 47 Days on Average | Best Return: 23.9% – After 185 Days | |||||||||||||||||||||
| Further Analysis | ||||||||||||||||||||||
| Sector: | Financial | Industry: | Diversified Investments | |||||||||||||||||||
| According to Thackray’s 2010 Investors Guide, the period of seasonal strength for the Financial Sector ranges from January 19th through to April 13th. The seasonality corresponds to the time when banks report fourth quarter earnings and provide favourable guidance for the coming year. | ||||||||||||||||||||||
| Current Consensus Recommend: | Outperform | |||||||||||||||||||||
| Recommendation 1-Month Ago: | Outperform | |||||||||||||||||||||
| Recommendation 3-Months Ago: | Outperform | |||||||||||||||||||||
| Disclaimer | ||||||||||||||||||||||
| Analysis, comments, calculations, and opinions offered in this report, available via EquityClock.com, are for information only. They should not be considered as advice to purchase or to sell mentioned securities. Data offered in this report is believed to be accurate, but is not guaranteed. | ||||||||||||||||||||||
| © 2010 EquityClock.com, member of the Tech Talk Financial Network | ||||||||||||||||||||||
Stocks mentioned in this post: GS
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