GS - The Goldman Sachs Group, Inc.

NYSE - NYSE Delayed Price. Currency in USD
219.43
+5.43 (+2.54%)
At close: 4:00PM EDT

219.50 +0.07 (0.03%)
After hours: 6:28PM EDT

Stock chart is not supported by your current browser
Previous Close214.00
Open214.95
Bid219.02 x 900
Ask219.76 x 800
Day's Range214.95 - 220.00
52 Week Range151.70 - 245.08
Volume3,018,518
Avg. Volume2,314,515
Market Cap80.276B
Beta (3Y Monthly)1.32
PE Ratio (TTM)9.20
EPS (TTM)23.86
Earnings DateOct 15, 2019
Forward Dividend & Yield5.00 (2.34%)
Ex-Dividend Date2019-08-29
1y Target Est235.23
Trade prices are not sourced from all markets
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  • Wall Street Invaders Won’t Clear This Moat
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    (Bloomberg Opinion) -- Supply-chain finance is the secret sauce behind Citigroup Inc.’s mid-20% return on equity from transaction banking.That might sound counterintuitive, especially in Asia. The export-led region is facing the brunt of supply dislocations as the U.S.-China trade war intensifies. But the skirmish isn’t a showstopper for financing. As production moves from one country to another, transactions that need to be greased with money or credit will occur somewhere else. They won’t disappear.For evidence, take a peek at Citi’s recent quarterly results. The bank has $715 billion in deposits from institutional clients. About $166 billion of it is in Asia, up 8% from a year earlier and growing faster than consumer banking deposits. What’s more, Citi doesn’t even have to aggressively seek corporate liquidity by promising high interest rates. It just has to work with a few hundred clients – not just Western multinationals like Procter & Gamble Co., but also Asian ones such as Alibaba Group Holding Ltd. and Xiaomi Corp. – by lubricating their vast global supply chains running into tens of thousands of vendors.Imagine a detergent maker in Indonesia that gets paid by P&G 90 days after billing. The company would be tempted to accept money from Citigroup even for 120 days if doing so helps to keep its domestic bank-financing lines unencumbered. Citi doesn’t take any credit risk on this small supplier because the bank is going to be paid by P&G, which also benefits by getting an extra 30 days to settle its bills. A big chunk of the corporate cash swirling on Citi’s balance sheet is what the multinationals have in their accounts at the bank , vast sums that ensure supply chains function smoothly.In a two-part series about virtual banking – the hottest new thing in Asian finance this year – my colleague Nisha Gopalan and I concluded that corporate cash management may be a more lucrative bastion than retail for the digital warriors to storm. That’s particularly so for Wall Street banks looking beyond fickle investment-banking revenue. However, even that “more modest leap of faith,” as we described the lure of transaction banking to the likes of Goldman Sachs Group Inc., will have trouble clearing Citi’s moat. It may not be impossible for an online-only bank to operate in more than 160 countries, deal with heavy penalties in case it flouts sanctions or gets dragged into a money-laundering scandal, and over time build its own war chest of deposits. But it’s certainly going to be difficult.None of this means that traditional transaction bankers can rest easy. In the world they’re familiar with, materials move one way; money in the opposite direction. The greater the risk of interruption to the flows, the higher the premium for ensuring they don’t. This age-old landscape is changing fast. The consumption of a Netflix movie or a Spotify song is purely digital. Deloitte estimates that by 2025, more than a third of all consumption in Australia, Hong Kong, Singapore and Malaysia will be done by people born after 1980. The spending of digital native generations – Y and Z – will be light on materials.Transaction bankers can’t dig themselves into a hole and pretend they’re engaged in a pure business-to-business activity. If you want to bank Uber Technologies Inc., you have to grapple with the financing of the discount coupons on late Uber Eats deliveries.Many things in the new digital supply chain will be done more efficiently by non-banks. Deloitte cites the example of Traxpay, chosen this year by Edeka Group, a large German food retailer, to handle the working capital needs of its vendors. Platforms like Traxpay will still need banks. But the real profit lies in owning the client relationships, not in providing money. To retain their edge banks will either have to buy promising fintech firms, or build their own rival products. Both options are capital-intensive; neither is guaranteed to succeed.We’ve previously characterized transaction banking as humdrum to distinguish it from its flashier cousin of retail digital banking. But not only is supply-chain finance juicy for banks, its meat-and-potatoes wholesomeness is drawing in fintech and Wall Street investment banks. The $715 billion of cheap liquidity sitting on the balance sheet of the big daddy of transaction banking is both a temptation for challengers, and a dare. It’ll be interesting to see where those deposits are five years from now.\--With assistance from Nisha Gopalan To contact the author of this story: Andy Mukherjee at amukherjee@bloomberg.netTo contact the editor responsible for this story: Matthew Brooker at mbrooker1@bloomberg.netThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Andy Mukherjee is a Bloomberg Opinion columnist covering industrial companies and financial services. He previously was a columnist for Reuters Breakingviews. He has also worked for the Straits Times, ET NOW and Bloomberg News.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.

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  • A Busted Goldman Airline Deal Is Investigated by Private Detectives
    Bloombergyesterday

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    (Bloomberg) -- It was a fundraising like no other: Goldman Sachs teaming up with two obscure brokerages on an unusual deal. Add to that controversial financier Lars Windhorst, acting as one of the architects behind the scenes.Investors snapped up the $1.2 billion in bonds that, in turn, channeled proceeds to a cluster of airlines linked to Etihad Airways. Within months, bankers handling the sale were crisscrossing the Atlantic, collecting awards for their creativity.Two years later, the deal went bust.A group of creditors is now resorting to unconventional tactics to recoup losses. They’ve hired a private intelligence firm. The mission: Dig out details into how the deal came together, including the roles played by Windhorst, the airline and the fundraising group, according to people with knowledge of the situation.The brewing fight places another unwelcome spotlight on Goldman Sachs Group Inc.’s willingness to raise large pools of capital in unorthodox or risky deals. It also threatens to drag the Wall Street giant into another blowup over its ties to Windhorst, whose web of business dealings has drawn fresh scrutiny in recent weeks.“There were a lot of strange characteristics,” Roger King, an analyst at research firm CreditSights, said of the bonds Goldman helped sell. “It was a bizarrely complicated deal. A hairy deal no matter who brought it.”One question at the center of the airline fundraising in 2015 and 2016 is why Goldman agreed to fill the breach as another big bank, HSBC Holdings Plc, dropped out, according to the people with knowledge of the matter. Such a large financing probably couldn’t be completed without the help of a global bank.Creditors including investment managers BlueBay Asset Management and Gramercy Funds Management have enlisted the private investigators to help them push for maximum recoveries from the busted bonds, the people said. Representatives for the two funds declined to comment or identify whom they’ve enlisted.Their effort contrasts with the typical reason that investors hire corporate spies. Usually, bondholders hire intelligence companies in less-developed countries to track down assets or follow the cash trail, said Robert Southey, founder of Southey Capital, a London-based broker. It’s relatively rare to get private investigators to look into deals that involve one of the world’s largest investment banks and a major airline group. One significant bondholder has already grown uncomfortable with the tactics, according to a person with knowledge of the situation.Spokesmen for Windhorst and Goldman Sachs declined to comment for this story. A spokesman for Etihad said the airline doesn’t comment on “rumors or speculation.” Desperate TimesEtihad faced a big problem in 2015. To expand from being a regional carrier into a global player, the company had bought stakes in several smaller airlines around the world. But some—like Air Berlin—kept bleeding cash. Windhorst, once the German airline’s largest shareholder, was looking to shore up its finances. Yet Air Berlin would have to pay dearly to tap global debt markets on its own.Etihad’s executives and Windhorst sketched out a rough plan, with Anoa, a small brokerage, tasked to work out the details, the people said. Special-purpose vehicles linked to Etihad, called EA Partners, would sell bonds. The EA Partners vehicles would then slice up the proceeds and offer loans of various sizes to the fleet of smaller carriers. Members of the airline group would make periodic payments to EA Partners, which would distribute interest to bondholders. Anoa was an affiliated company of Windhorst’s investment arm. The financier had been tapping into his connections to drum up business for Anoa with dreams of establishing it as a widely known boutique. The aspirations wouldn’t pan out, and Anoa would eventually shut down. But in a sign of how close Windhorst was to the firm, its former chief executive officer is now CEO of Windhorst’s own investment vehicle.​HSBC OutWhile Anoa was key to designing the transaction, it lacked the fundraising firepower of a global bank. HSBC was earmarked to lead the deal alongside Anoa and ADS Securities, an Abu Dhabi-based boutique. But shortly before the sale was to proceed, the British bank was suddenly out.Anoa’s participation was among reasons that HSBC grew hesitant, but Etihad executives also fretted about whether the bank was committed enough to carrying out the complex transaction, according to three people familiar with the situation. Representatives for HSBC and ADS declined to comment.Goldman Sachs stepped in.First, the Etihad deal had to be cleared through a number of internal committees at Goldman because of the transaction’s structuring oddities and the involvement of a sovereign entity, Abu Dhabi, the ultimate parent of Etihad, one of the people said. Windhorst’s involvement was another potential issue.A high school dropout, he was once hailed as one of Germany’s most talented entrepreneurs before bankruptcies and lawsuits. But in the summer of 2015 his reputation was on the mend, and bankers were showing renewed interest in handling his business.Though he didn’t have a formal role in the offering, Windhorst was involved in designing the transaction and was present on at least one occasion when Etihad’s then-leader presented the deal to investors in London, a person with knowledge of the matter said.Yet it’s unclear whether that was known to Goldman’s compliance executives. The firm’s internal watchdogs were wary of business ties with the financier. In September 2015—when the first Etihad bonds were sold—Goldman’s compliance officers resisted proposals by the bank’s executives to take Windhorst on as a trading client because of concerns about his troubled past, according to communications seen by Bloomberg.Grounded PlansEA Partners issued a first set of junk-rated bonds totaling $700 million in September 2015. In April 2016, senior Etihad executives and then-Goldman banker Nader AlSalim  were feted on stage with an industry award for the innovative structuring at a plush beachfront hotel in Miami.Two months later, the financing team raised another $500 million, bringing the total to $1.2 billion. Offering documents show that 93.5% of the proceeds went to the airline group. In a typical sale, the rest goes to fees and expenses.Not long after, the deal began to go awry. Airlines in the partnership—Air Berlin, Alitalia and Jet Airways—succumbed to financial woes. As they worked their way through insolvency proceedings, the EA Partners bonds cratered. Meanwhile, Etihad changed its strategy, no longer supporting the affiliate carriers before embarking on a management overhaul.The bond documents themselves didn’t explicitly guarantee support from Etihad. One banker who was involved in marketing the deal said there was always an implicit understanding that Etihad would provide support if needed, and that’s how the debt was described to investors.An investor group left holding the bag has hired law firms and financial advisers to help maximize recoveries—the standard practice when things go south on debt investments. The hiring of a corporate intelligence firm is much less common, especially one that scrutinizes financial firms involved, and not just the borrower.Goldman’s ties with Windhorst were documented in a lawsuit last year by a former executive, Chris Rollins. He accused the bank of scapegoating him to insulate itself from questionable transactions carried out with a financier who isn’t identified in court records. That person was Windhorst, based on the descriptions in court documents and interviews.Goldman is disputing Rollins’ claims. And recently, it won a bid to push the case into arbitration, a move that would effectively keep a lid on more details of the firm’s interactions with Windhorst.“Whether in public or private, the evidence shows that top execs allowed these very large, risky deals to happen,” said Seth Redniss, a lawyer for Rollins.\--With assistance from Archana Narayanan and Dan Reichl.To contact the authors of this story: Sridhar Natarajan in New York at snatarajan15@bloomberg.netLuca Casiraghi in London at lcasiraghi@bloomberg.netLayan Odeh in Dubai at lodeh3@bloomberg.netTo contact the editor responsible for this story: Michael J Moore at mmoore55@bloomberg.net, David ScheerAlan GoldsteinFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.

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  • AAPL Stock: Apple Software Becomes Lifestyle
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    Hardware becoming software is one of the key trends of this decade. As Apple (NASDAQ:AAPL) prepares to refresh its product line for the fall of 2019, it is selling its software as a lifestyle.Source: Shutterstock The key product launch investors need to consider is the Apple Card, the company's entry into finance.While Facebook (NASDAQ:FB) wants to create its own money and replace the current Visa (NYSE:V)-dominated payment infrastructure with something cheaper, Apple Card is a gloss on MasterCard (NYSE:MA), with personal finance delivered through an app and integration with existing wireless payment technology.InvestorPlace - Stock Market News, Stock Advice & Trading TipsApple is also throwing money at original content, hoping to overwhelm Spotify (NASDAQ:SPOT) in podcasts and Netflix (NASDAQ:NFLX) in streaming entertainment. * 7 Stocks Top Investors Are Buying Now Apple's strategy is coming into focus. It's a lifestyle and an indenture. It's a walled garden where, in exchange for promises of privacy, Apple controls everything you have, including your cash flow. The Biggest iOS LaunchApple's biggest product launch is now going through its final beta test, iOS 12.4 beta 7. Its successor, iOS 13, was announced at the June Worldwide Developer's Conference.The key new feature supported by 12.4 is the Apple Card, on which Goldman Sachs (NYSE:GS) estimates it has spent nearly $275 million, transforming itself from an investment bank into a consumer bank. The card itself is designed around the app, with daily cash rewards and full integration with the Apple Wallet to track spending.The card is thus meant to change behavior, which now favors physical debit cards for most transactions. The potential bonanza here is enormous. People who pay off their cards spend an average of $1,154 with them each month, and the average user carries $6,354 of credit card debt. Goldman expects to offer $1,000 in credit to those with credit scores as low as 600, and charge Apple Card customers interest rates of 13%-24% on balances. Apple's Ho-Hum HardwareWith the next iPhone already being called a clunker, Apple has to extract more from software and services to maintain last year's 15% growth rate, with 22% of revenue hitting the net income line.The iPhone 11 design itself looks like a greatest hits album from previous iterations. Its main improvement is a bigger battery. The same is true for the latest MacBook, which only received minor tweaks on existing designs.But the hardware is the center of a software ecosystem that brings Apple profit from every corner of a customer's life. Software and services are more profitable than hardware.This extends to the Apple Watch. Given how many stores had the watch at clearance prices this month, including the Apple Watch 4, an Apple Watch 5 can't be far off. But the hardware isn't likely to change much. It will just be capable of running more software, especially health software. Health will follow cash into the Apple profit column.Critics worry the emphasis on service revenue will compromise the user experience. But people who believe in Apple tend to go all-in. The most important point about the iPhone's market share is its stability. They have half of the U.S. market and over one-fifth of the global market. The Bottom LineAn Android is a phone, a utility that offers unlimited choice. An iPhone is a lover, seducing and then demanding increasing loyalty.Once you're in the Apple ecosystem, the company wants to make it a lifestyle, handling your money, your entertainment, even your health.That's CEO Tim Cook's bet, that Apple products can be more than phones or watches or PCs, but a lifestyle for those seduced by its design and brand promise.Dana Blankenhorn is a financial and technology journalist. He is the author of a new environmental story, Bridget O'Flynn and the Bear, available now at the Amazon Kindle store. Write him at danablankenhorn@gmail.com or follow him on Twitter at @danablankenhorn. As of this writing he owned shares in AAPL. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 Stocks Top Investors Are Buying Now * The 10 Best Cryptocurrencies to Keep on Your Radar * 7 Marijuana Penny Stocks That Could Triple (But You Won't Make Money) The post AAPL Stock: Apple Software Becomes Lifestyle appeared first on InvestorPlace.

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  • 3 Great Value Stocks to Buy This July
    InvestorPlace5 days ago

    3 Great Value Stocks to Buy This July

    After starting the year out on a dour note, the markets made a complete reversal. These days, the major averages -- like the S&P 500 and Nasdaq Composite -- continue to hit new record highs. The Dow Jones isn't doing too shabby either.But as the overall market surges higher, many stocks are quickly moving out of bargain status and perhaps into the expensive category. For those investors looking for value stocks, pickings are slim.Or are they?InvestorPlace - Stock Market News, Stock Advice & Trading TipsThe truth is, there are plenty of value stocks still out there to be had. Sure, you may not find them among the FANGs, but bargain hunters can still find great deals on value stocks with low P/Es, strong earnings profiles, sales and even strong dividends.And considering that over the long haul, value tends to beat growth, now could be the best time ever to load up on some of these value stocks. * 7 Stocks Top Investors Are Buying Now With that, here are three great value stocks to buy this July and hold for a long time. Goldman Sachs (GS)Trailing P/E: 8.9The vampire squid is becoming a kinder and gentler, well, vampire squid. Investment bank Goldman Sachs (NYSE:GS) has become one of the best value stocks around. Today, shares can be had for a trailing P/E of just 8.9. That's dirt cheap considering its future potential.The reason behind the numbers is simple and comes from its former vampire squid name. Stock, currency, and derivatives trading used to make up the bulk of GS revenues in previous years. Those operations are still there to some extent. But thanks to regulation, Goldman has had to look for other ways to grow. Without those, investors have sort of abandoned the major financial name.However, Goldman has found the solution in consumer banking to the mass affluent. The firm's personal lending and deposit account platform, Marcus, has been extremely successful -- gathering more than $46 billion in deposits and issuing $4.6 billion in loans. Meanwhile, its deal to buy out wealth manager United Capital Financial Partners adds technology, investment management, and additional mass affluent assets into its umbrella. The idea is that Goldman is going back to its roots as more of a banking institution than a trading one.This is wonderful for investors. These are the kind of operations that throw off plenty of steady cash flows. And they already have, thanks to strong numbers, Goldman was able to increase its dividend and announce a massive $7 billion buyback program.However, investors continue to ignore the potential. That makes Goldman Sachs a great value stock to buy today. Micron TechnologyTrailing P/E: 5.09Modern life runs on semiconductors. However, there is a big difference between the chips needed for self-driving cars and the one in your garage door opener. For Micron Technology (NASDAQ:MU), the fact that it focuses on the boring, analog side of that equation hasn't been so good in recent years.Analog chips are so standard that pricing for them is actually traded like a commodity. There's a spot market for these chips … just like a barrel of oil or bushel of corn. So, with supplies of DRAM and other basic analog chips being in a glut, Micron has been largely ignored -- unlike say, NVIDIA (NASDAQ:NVDA) -- and has become one of the cheapest value stocks around. You can currently snag MU stock for P/E of around 5.At that bargain price, you should snag all you can.For starters, the glut of DRAM may end as soon as the trade war goes. Already, Micron has seen a boost since President Donald Trump announced that firms can start selling chips to China's Huawei. Without trade issues, China should once again start consuming DRAM with reckless abandon.But what is really exciting is that MU has lucrative chipsets. At the same time, Micron continues to improve its memory chips to make them less like commodities and more irreplaceable to manufacturers. This includes its 3D XPoint technology -- which allows for very rapid storage and release of data. The kind of chip that is perfect for autonomous cars and A.I. * 9 Retail Stocks Goldman Sachs Says Are Ready to Rip Over the long haul, these chips will help reduce Micron's dependency on boring DRAM and allow it to profit from higher margins and demand. In the meantime, investors can score this value stock for basically free while they wait for the turnaround. PepsiCo (PEP)Trailing P/E: 14.6By nature, most consumer staples are considered value stocks. That's because many of them aren't fast-growing anymore and are mostly known for their dividends. So, when you can find a steady-eddy consumer stock, trading for a low valuation that also has some serious growth behind it, you have to consider it for your portfolio. And that sums up PepsiCo (NYSE:PEP) to a "T."PEP doesn't need an introduction. We all know the global provider of sweet beverages and salty snacks. The firm giant is pulling in billions in annual revenues across more than 200 different countries. But despite its size, Pepsi is still growing -- with management looking to score 4% to 6% organic growth this year.How PEP will do that comes down to continued improvements to its product mix. That includes new organic, healthy snacks as well as the continued foray into ready-to-drink coffee and sparkling water.Meanwhile, CEO Ramon Laguarta has continued to act on his promise of a "faster, stronger, better" PepsiCo. That includes investing a hefty dose of tech, consuming intimacy initiatives and looking to cut costs. So far, Laguarta's moves are working. Last quarter was simply smashing for PEP.And yet, the market still doesn't seem to care.That has made PEP a wonderful value stock to buy. With a P/E of just under 15, investors aren't pricing in any of the firm's growth potential. And with its 2.88% dividend, you're paid while waiting for that potential to be realized.At the time of writing, Aaron Levitt did not hold a position in any stock mentioned. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 Stocks Top Investors Are Buying Now * The 10 Best Cryptocurrencies to Keep on Your Radar * 7 Marijuana Penny Stocks That Could Triple (But You Won't Make Money) The post 3 Great Value Stocks to Buy This July appeared first on InvestorPlace.

  • Morgan Stanley and Goldman Sachs Play the Long Game
    Bloomberg5 days ago

    Morgan Stanley and Goldman Sachs Play the Long Game

    (Bloomberg Opinion) -- Goldman Sachs Group Inc. and Morgan Stanley are the two Wall Street banks most connected to high-stakes trading. Historically, that made them seem glamorous relative to the other big U.S. institutions, which focused on the more steady business of retail banking.The tide has turned. Persistently low volatility has made it clear that banks can’t count on traders to drive profits. Goldman’s equities revenue beat expectations earlier this week, in a small sign of hope, but Morgan Stanley’s results on Thursday were more far more indicative of the trend. Its $2.13 billion from equities was the highest among banks but was down 14% from a year ago and fell short of even the lowered estimates of $2.27 billion. In fixed income, currencies and commodities, revenue dropped 18% rather than the expected 7% decline.This puts Goldman and Morgan Stanley in a tough spot. They’re not well positioned to immediately compete with Bank of America Corp., Citigroup Inc., JPMorgan Chase & Co. and Wells Fargo & Co. in catering to the banking needs of Main Street. At the same time, the bank executives have to feel pressure to limit the quarter-to-quarter fluctuations that are at the mercy of the whims of the global markets.Reading between the lines, their answer to this quandary appears to be more emphasis on wealth management.Now, this isn’t exactly a revelation, nor an abrupt shift. Morgan Stanley has been moving into wealth management strategically for a while, and Goldman’s division already oversees more than $1 trillion in assets. Still, the banks’ latest commentary and moves in the past quarter make clear that they see this business, which produces a steady stream of fee-based income, as a way to leverage their reputation as titans of Wall Street.In Morgan Stanley’s earnings call on Thursday, Chief Executive Officer James Gorman specifically praised Dan Simkowitz for his work on building up the firm’s asset-management unit. And by all accounts it was well deserved, with the division’s revenue at the highest in five years. On the wealth-management side, Morgan Stanley posted $4.41 billion of revenue, which was 2% higher than last year and blew away analysts’ estimates for a 9% decline.Moreover, Morgan Stanley’s wealth-management division posted an impressive 28% profit margin. So impressive, in fact, that it drew more than one question from analysts about whether the bank can sustain that sort of momentum, including from Mike Mayo of Wells Fargo. Gorman insisted “it’s not like we are sitting back and saying we are really milking this.” Rather, “we’re playing for the long run.”At Goldman, Chief Executive Officer David Solomon on Tuesday highlighted its $750 million purchase of wealth manager United Capital, which was announced in May and represented one of Goldman’s biggest acquisitions in recent memory. Bloomberg News’s Sridhar Natarajan noted at the time that Solomon has made building out fee-based businesses a high priority so that shareholders can more easily estimate the bank’s growth and earnings.None of this is to say that Morgan Stanley and Goldman will abandon their positions as premier trading firms. But it’s notable to parse what Morgan Stanley Chief Financial Officer Jon Pruzan told Bloomberg News’s Sonali Basak in an interview. “We’re No. 1 in the world” in equities trading, he said, adding that “we would expect to maintain our market share in this type of environment.” He reiterated those comments during the analyst call.It’s certainly possible that volatility will resume, given that stock markets are hovering near all-time highs and global central banks are on the verge of further easing monetary policy. But framing expectations in terms of maintaining market share would seem to indicate that Pruzan expects further challenges for trading in the coming months and years. Ted Pick, who oversees all of Morgan Stanley’s traders and investment bankers, made some interesting comments in May about the equities business. He said he had led the division with “high levels of paranoia” because it felt like a couple of competitors were coming after the bank, either on price or looser risk requirements or something else. He said “that’s not a game we’re going to play.”Rather, as these second-quarter earnings make clear, Morgan Stanley is playing the long game. So is Goldman. When it comes to dealing with the fickle nature of financial markets, sometimes the most sound strategy is to play the hand you’re dealt.To contact the author of this story: Brian Chappatta at bchappatta1@bloomberg.netTo contact the editor responsible for this story: Daniel Niemi at dniemi1@bloomberg.netThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Brian Chappatta is a Bloomberg Opinion columnist covering debt markets. He previously covered bonds for Bloomberg News. He is also a CFA charterholder.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.

  • Bloomberg5 days ago

    Mnuchin Says No Change to U.S. Dollar Policy ‘As of Now’

    (Bloomberg) -- Treasury Secretary Steven Mnuchin said there is no change in the U.S.’s dollar policy “as of now” but wouldn’t rule out a shift at some stage in the future.There has been “no change to the dollar policy,” he said during an interview Thursday following a Group of Seven finance ministers’ meeting in Chantilly, France. “This is something we could consider in the future but as of now there’s no change to the dollar policy.”The Trump administration has softened the long-held U.S. stance of supporting a strong dollar, favoring a stable exchange rate instead as it battles China in a trade war and threatens tariffs on other countries. Mnuchin has also signaled a preference for letting markets determine a currency’s value. “These are very, very large, liquid markets,” he said in the interview.The dollar retraced gains against the euro after Mnuchin’s remarks, trading at $1.1217 per euro at 2:05 p.m. in London.Mnuchin declined to comment on the levels of the U.S. currency.When asked during a press briefing if he believes that a strong dollar is in the nation’s best interest, Mnuchin said: “I’m not going to make any specific comments on the dollar policy or the euro-dollar policy.”President Donald Trump has repeatedly brought up his preference for a weaker dollar as of late. He tweeted this month that Europe and China are playing a “big currency manipulation game” and called on the U.S. to “MATCH, or continue being the dummies.” He’s made noise behind the scenes, too, lamenting to job candidates for the Federal Reserve board that the dollar’s strength could blunt economic growth.Trump is increasingly concerned that a strong U.S. dollar is hampering economic growth ahead of his re-election and has asked his staff to find ways to weaken the greenback, Bloomberg News has reported.Trump’s public comments have stirred speculation in markets about a possible U.S. currency intervention. Goldman Sachs Group Inc. last week flagged it as a low but increasing risk, while Pacific Investment Management Co. has said a full-blown currency war can no longer be ruled out.In the interview Thursday, Mnuchin declined to say whether the administration has looked into intervening in markets to weaken the dollar.Previous MovesAdministration officials believe that for any move on the dollar to succeed, the Fed must agree with the policy and clearly communicate its support, according to people familiar with the matter. The Treasury Department and Fed have coordinated the last three U.S. currency interventions, splitting the amount transacted evenly between them in 1998, 2000 and 2011 in order to nudge the dollar’s value.Trump’s focus on the dollar was heightened after the European Central Bank said June 18 it may lower rates for the euro region, prompting a fall in the currency’s value against the greenback.Trump has since complained that the Fed is putting U.S. exporters at a competitive disadvantage by not also considering a rate cut, and has said that the U.S. would be better off with ECB President Mario Draghi in charge of its central bank instead of Fed Chairman Jerome Powell.Powell has signaled that he’s considering an interest-rate reduction, a move that would have the effect of weakening the dollar and may appease the president. Trump has repeatedly castigated Powell and Fed for rate increases last year.A strong dollar gives American consumers more buying power for imports while raising prices for U.S. exports, widening trade deficits that Trump has vowed to close.The Bloomberg dollar index is roughly unchanged on the year but a Fed trade-weighted measure of the U.S. currency is not far below the strongest since 2002, underscoring the headwinds American exports face overseas.(Updates with context starting in sixth paragraph.)To contact the reporter on this story: Saleha Mohsin in Chantilly at smohsin2@bloomberg.netTo contact the editors responsible for this story: Alex Wayne at awayne3@bloomberg.net, Brendan Murray, Scott LanmanFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.