We recently compiled a list of the 10 Best Holding Company Stocks To Buy Now. In this article, we are going to take a look at where The Goldman Sachs Group, Inc. (NYSE:GS) stands against the other holding company stocks.
“The Market is Anticipating Too Much”
Some may think the Fed meeting on the 18th of September may have put an end to the basis point cut debate, however, while the Fed did initiate a rate cut by half a percentage, two Fed meetings are remaining before the end of 2024. To discuss the likely rate cut path, Chris Versace, Tematica Research CIO, appeared in an interview on Yahoo Finance on September 24.
Versace suggests that it is quite impossible to predict the path the Fed is to adopt before 2024 ends and the decision will likely be more reliant on data. The labor market weakened for the second consecutive month and, according to him, the Fed will probably go for another 50 basis point cut, if not more.
He urges investors and traders to triangulate all data points to make decisions including economic data, inflation data, and the speed at which the economy is growing. Versace states that the market right now is stretched and that there is more to the bigger picture such as the upcoming elections, earnings growth, and the Fed’s decisions.
“Volatility Should Remain Elevated”
On September 25, Burns McKinney, NFJ Investment Group Managing Director & Senior Portfolio Manager, appeared in an interview on Yahoo Finance to discuss the market outlook. Amid declining consumer confidence and a shrinking job market, volatility, according to him, will remain a constant element.
He suggested that signs of job weakness coupled with inflation have impacted consumer confidence negatively, especially after the Fed’s decision. McKinney added that there is a disequilibrium in the number of jobs vacant and the number of workers available right now, leading to weakened employment data.
From an investor standpoint, he deems volatility a constant state of the market, given that the country also has an upcoming election in the coming weeks. In addition to that, geopolitical tensions in Europe and the Middle East will likely add to the turmoil. McKinney shares that investors should focus more on dividend-paying stocks to remain secure and resilient through the volatility.
Despite the turmoil, some stocks may always be promising given their strong footing and dominance in the industry. With that, let’s take a look at the 10 best holding company stocks to buy now.
Our Methodology
To come up with the 10 best holding company stocks to buy now, we examined multiple rankings on the internet and our rankings. We then ranked the top 10 based on the largest number of hedge fund holders at the end of Q2 2024.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
A close-up of a financial advisor giving advice to a customer, demonstrating the importance of consumer and wealth management.
The Goldman Sachs Group, Inc. (NYSE:GS)
Number of Hedge Fund Holders: 68
The Goldman Sachs Group, Inc. (NYSE:GS) is one of the largest investment banking companies that specializes in banking, asset management, and wealth management. The holding company owns several subsidiaries including Folio Financial, GreenSky LLC, The Ayco Company L P, and NN Investment Partners.
In the second quarter of 2024, the company logged $12.73 billion in revenue and $3.04 billion in earnings. Its global banking and markets segment generated $8.18 billion in revenue, backed by higher returns from equities. During the same quarter, the company’s assets under supervision reached $2.93 trillion, of which $86 billion worth of assets came from Q2 2024.
The Goldman Sachs Group, Inc. (NYSE:GS) is notorious for its acquisitions and mergers, explaining why the company was ranked first in Worldwide Announced and Completed Mergers and Acquisitions. So far in 2024, the company closed the acquisition of Xpress Wellness LLC, a healthcare services provider to rural communities. In addition to that, last month, Goldman Sachs also made a minority investment in SePRO, a water solutions company.
Overall, The Goldman Sachs Group, Inc. (NYSE:GS) is one of the best holding stocks to buy now and we say that because of its large clientele and solid expansion strategy. Analysts 12-month median price target of $528.5 points to a 6% upside from current levels. Overall, GS was held by 68 hedge funds at the close of Q2 2024 and Fisher Asset Management was the largest shareholder with a position worth $2.66 billion.
Ariel Investments’ Ariel Appreciation Fund stated the following regarding The Goldman Sachs Group, Inc. (NYSE:GS) in its Q2 2024 investor letter:
“Shares of global investment bank, The Goldman Sachs Group, Inc. (NYSE:GS), also rose in the period following solid earnings results, highlighted by strength in fixed income, currencies 1 Sindreu, Jon. “The Second Quarter Split the Market.” The Wall Street Journal, July 1, 2024, p. B9. and commodities (FICC) as well as equities trading and better-than-expected investment banking fees. Meanwhile, GS continues to successfully execute on its strategic initiatives to improve the overall return of the company. It is right sizing headcount and narrowing its ambitions in consumer strategy through divestitures and working to improve profitability in Platform Solutions by 2025. With the possibility of increased capital requirements from its regulators, GS plans to reign in buybacks over the short-term but maintain its dividend. Looking ahead, we continue to view the near and long-term outlook for Goldman as attractive, given favorable business trends, continued positive momentum on strategic initiatives and active expense/capital management programs.”
Overall GS ranks 9th on our list of the best holding company stocks to buy. While we acknowledge the potential of 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 time frame. If you are looking for an AI stock that is more promising than GS but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.