- [Teacher] Saint Mary's College, BISED 123,
Financial Management, Goldman Sachs, Team 2, Take 2, Action.
- Good morning, everyone.
I'm Taylor.
This is Kevin.
This is Nick.
And, we're doing
our Goldman Sachs intrinsic valuation report.
- So, a little outline; we're just going to go over
the background of the company,
some of the financial conditions and technical analysis,
then onto stock valuation.
And, then, our recommendation (mumbles).
And, then, a little background
of Goldman Sach's publicly-traded
financial services company, traded on
the New York stock exchange.
It started in 1969 by Marcus Goldman
and Samuel Sachs.
And, they have an employee base around 40,000 people.
Some of the key people in Goldman Sachs,
including the former CEO, Lloyd Blankfein.
And, he became chairman, again,
after being CEO, in September.
And, the new CEO, David Solomon became CEO in October.
- On to the SWOT Analysis, the strengths are...
Goldman Sachs has a staff of around 37,000 people,
and they're in 30 countries worldwide.
Weaknesses:
they've had some litigation issues:
fraud and bribery cases.
And, they were involved in the European debt crisis.
Opportunities:
They account for 70% of the emerging accounts, globally.
And, threats of political, legal, economic and operational;
they've had some political issues.
Financial standings:
In regards to the five things we've evaluated,
they are fit, in total assets, into the trillions.
They have 9/10, 900 billion dollars.
They rank fifth on J. P. Morgan,
Bank of America, Wells Fargo and City Group.
Their financial conditions are...
they have a net profit margin of 82.4%.
Their ROA is .48.
ROE is 5.07, and the debt-to-equity multiplier is 1.
Overall, good.
- In the interest of keeping this rolling a little bit,
I know we're taking up some time.
Overall, the financial conditions are good.
When they're good, you want to buy, right?
When they're bad, you don't want
to buy, so, you want to sell.
For our technical analysis, the target price
that we're looking for is $237.50 'cause
the current stock price is $93.04,
with a premium of 22.7%.
It's trending up, right now.
And, as you can see, in recent months, it has been down,
and it's gonna hit that support line
and bounce right back up to our (mumbles) line, so...
Through the perpetuity model...
Thank you.
Our return on equity was about 79%,
and our growth percentages, we found a line,
and, then, we made our best estimates
on what we thought, and it was $260.11.
- So, using Gordon Growth, our valuation
for intrinsic values should have been $43.13,
at a premium of %25.6,
using some of what Taylor just said (mumbles)...
And, then, the multiple approach,
also at the intrinsic value, is $233.40,
at a premium of %20.6, using some of the key multiples,
and, we found, yeah...
On to the discounted cash flows, we found our percentages
for the weighted average cost of capital, online,
and we adjusted it to our target prices
and our valuation in the stocks.
So, we have a 9%, $242.34, which is in our medium range.
Now, going on to the intrinsic valuation,
based off our weights, five percent,
five percent, 40 and 50.
We value this at $237.50, and we recommend buy.
- So, we recommend buy.
At this point, yeah, we might see it go down
a little bit more, so you might want to wait,
but at the end of the day, we need to buy now.
And, then, so we can sell high later,
and make a nice profit margin off of this stock.
Total trade to 12.
Do you guys have any questions?
Thank you very much, and stay safe in this weather;
it's just the tip of this storm.
(laughter of students)
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