Among the money center banks considered in this investment thesis, Goldman Sachs is best positioned and most likely to return a high level of capital (72%) as a percentage of estimated 2013 earnings.
Fed Stress Tests: Ally Financial is the only bank not meeting the Fed standards. All of the other 18 holding companies showed a Tier 1 Common Ratio higher than 5% under the central bank's severe loss scenario.
Goldman Sachs took its value-at-risk down to $86M in 2012, 24% below 2011, and the lowest level in 7 years, according to its 10-K filing. VaR measures how much a firm can lose in a day with 95% confidence.
GS Market cap at $66.27B, most recent closing price at $144.45
Diluted TTM earnings per share at 10.42, and a MRQ book value per share value at 140.58, implies a Graham Number fair value = sqrt(22.5*10.42*140.58) = $181.55.
Based on the stock's price at $137.13, this implies a potential upside of 32.39% from current levels. PEG at 0.48.
Sentiment: Strong Buy
The big kids on Wall Street had a big fourth quarter. JPMorgan made $1.39 per share, up 54 per cent versus a year ago. Goldman Sachs earned $5.60 a share, more than tripling the fourth quarter of 2011.