In the upshot of Donald Trump sealing the 2016 US Elections with victory, the financial sector has stood as one of the best performers to end the year. Banks, in particular, have led this surge.
Firms in the broker/dealer market, however, have also been doing well and are in position for more gains at the beginning of 2017. For investors, a popular recommendation from most analysts is Goldman Sachs Group Inc., which is one of the most famous investment banking companies in the world today.
Since the election, the GS stock has soared almost 33%, easily beating an otherwise-respectable growth of about 6.5% for the S&P 500 in the same time period. GS has reached its highest at $244.46 since 2011 on December 15  on the Federal Reserve decision to hike rates, which greatly benefited banks.
The chart below displays the budding gain in Goldman Sachs right after the US elections  which the stock has settled trading within the range of $206.14 and $213.27 beginning November 14. The second notable leap following the election aftermath came around the November 30 – December 1 period, wherein GS jumped to 226.73 on the latter date .
The stock is up by 0.24% or 59 cents to $241.56 in the previous session. It has a rating of Zacks Rank #1, or a ‘Strong Buy’.
GS Stock: Is It Overbought?
Whenever a company would rise immensely in such a short time frame, especially that of mega caps, investors have to be concerned about an extension of the bullish trend.
Luckily those who are monitoring GS, shares have a forward PE below 16, which less than the overall market at present. From that perspective, the GS stock can even drag on a bit further at the beginning of the upcoming year.
It is also worth noting that GS possesses an impressive outlook from a moment point of view, boasting of an ‘A’ grade on that metric. The firm has witness a price change that is quite greater compared to its industry associates, while its change in regards to earnings estimates has also been superior.
GS Earnings Estimates
Goldman Sachs has seen a growing consensus estimate for both the current quarter and the current year thanks to an outbreak of analyst estimate hikes. Over the past two months, the current quarter estimate has climbed by 6.5% while the full year estimate has added about 4.3% as well.
Nonetheless, expectations and estimate increases aside, Goldman is riding a string of four consecutive beats in earnings season. Additionally, in the past five years, it has only missed once.
Right now, Goldman is in an excellent industry right now that has a top 20% rank, while the financial sector is at the top of the charts as well. That’s only a part of why Goldman Sachs is a great recommendation currently; with its impressive run on the momentum front and reasonable metrics regarding key valuation ratios, these factors make a compelling story for GS investors heading into the New Year.
For a great financial pick in 2017, Goldman Sachs is something you should keep your eyes on, especially of its potential in becoming a better buy next year, compared to the somewhat overbought regional banks.
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