Here’s Why Moon Capital Management Liquidated Goldman Sachs Group (GS)

Moon Capital Management, LLC, an investment management company, released its fourth quarter 2024 investor letter. A copy of the letter can be downloaded here. The majority of experts believed two years ago that a U.S. recession might be approaching within the next twelve months. Two years later, however, the economy has managed to escape contraction, inflation is under control, profit margins are strong, and investor confidence has returned. The S&P 500 has also generated its best two-year return since 1998, the year before the Internet investment bubble burst, with a 23% gain in 2024. In addition, please check the fund’s top five holdings to know its best picks in 2024.

Moon Capital Management highlighted stocks like The Goldman Sachs Group, Inc. (NYSE:GS) in the fourth quarter 2024 investor letter. Founded in 1869, The Goldman Sachs Group, Inc. (NYSE:GS) is a financial institution that operates through Global Banking & Markets, Asset & Wealth Management, and Platform Solutions segments. The one-month return of The Goldman Sachs Group, Inc. (NYSE:GS) was -1.96%, and its shares gained 52.74% of their value over the last 52 weeks. On January 8, 2025, The Goldman Sachs Group, Inc. (NYSE:GS) stock closed at $580.02 per share with a market capitalization of $182.074 billion.

Moon Capital Management stated the following regarding The Goldman Sachs Group, Inc. (NYSE:GS) in its Q4 2024 investor letter:

“Another of our recent sales was The Goldman Sachs Group, Inc. (NYSE:GS), a position we liquidated at approximately $605 per share. While we have held positions in Goldman Sachs at various times in the past, the most recent stake was established in 2019, when shares were trading below $200 per share. Over the years, we’ve had multiple opportunities to accumulate shares at or below tangible book value. Although tangible book value is a crude metric, we generally find Goldman Sachs highly attractive at these levels in relation to its normalized earnings power. Today, tangible book value stands at $312 per share. With the stock recently trading above $600, it was priced at 1.9 times tangible book value – a level rarely seen over the past decade.

Unlike our decision to sell CVS, which was influenced by operational issues and capital allocation decisions, the sale of Goldman was primarily a matter of valuation. While the company remains a well-run business (albeit with room to improve), its stock price has increased more rapidly than has the underlying value of its business…” (Click here to read the full text)

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The Goldman Sachs Group, Inc. (NYSE:GS) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 72 hedge fund portfolios held The Goldman Sachs Group, Inc. (NYSE:GS) at the end of the third quarter which was 68 in the previous quarter. The Goldman Sachs Group, Inc. (NYSE:GS) reported net revenues of $12.7 billion in the third quarter, up 7% year-over-year. While we acknowledge the potential of The Goldman Sachs Group, Inc. (NYSE:GS) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

In another article, we discussed The Goldman Sachs Group, Inc. (NYSE:GS) and shared the list of best performing stocks in 2024. In addition, please check out our hedge fund investor letters Q4 2024 page for more investor letters from hedge funds and other leading investors.

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Disclosure: None. This article is originally published at Insider Monkey.