1. The Goldman Sachs Group, Inc. (NYSE:GS)
Factorial Partners’ Stake Value: $4,304,000
Percentage of Factorial Partners’ 13F portfolio: 3.49%
Number of Q2 Hedge Fund Holders: 70
The Goldman Sachs Group, Inc. (NYSE:GS) is a financial institution that offers a variety of financial services to corporations, financial institutions, governments, and individuals around the world. Investment Banking, Global Markets, Asset Management, and Consumer & Wealth Management are its four business segments. Factorial Partners added The Goldman Sachs Group, Inc. (NYSE:GS) to its Q2 portfolio, acquiring 14,490 shares worth around $4.30 million, representing 3.49% of the fund’s total 13F holdings.
On April 14, The Goldman Sachs Group, Inc. (NYSE:GS) declared a $2.00 per share quarterly dividend. The dividend was payable on June 29 to shareholders of record as of June 1. The Goldman Sachs Group, Inc. (NYSE:GS) shares deliver a dividend yield of 2.38% as of August 11.
BMO Capital analyst James Fotheringham reduced the firm’s price target on The Goldman Sachs Group, Inc. (NYSE:GS) to $461 from $475 on July 19, but maintained an ‘Outperform’ rating on the stock. While the company reported an “impressive” revenue-driven beat, the analyst lowered his forward estimates due to higher expected operating and credit costs, according to a research note. Fotheringham adds that in the long run, The Goldman Sachs Group, Inc. (NYSE:GS) can maintain mid-teens RoTCE due to ongoing tailwinds from share gains in core IB/GM franchises, improved profitability of higher-growth adjacencies, and ongoing capital and funding optimization.
Among the hedge funds tracked by Insider Monkey, 70 funds were bullish on The Goldman Sachs Group, Inc. (NYSE:GS) at the end of June 2022, with a collective stake of around $4.62 billion. Ken Fisher’s Fisher Asset Management is a major shareholder of the company, with more than 3.2 million shares worth $976 million.
Here is what Ariel Investments had to say about The Goldman Sachs Group, Inc. (NYSE:GS) in its Q4 2021 investor letter:
“Rising interest rates, after a surprisingly long period of low absolute rates and negative “real” rates, will create a headwind. While there has been much debate about the cause of these low rates, we believe the most important factor has been the $120 billion in monthly federal reserve open market bond purchases and the accumulation of an $8 trillion balance sheet. The former will end, and the latter will shrink. It is not just the Fed that has aggressively purchased bonds, bidding up prices and lowering yields. Bond traders and hedge fund managers have added to positions, confident that being on the same side as the Fed was the wise place to be. Now as the Fed is about to become a seller of bonds rather than a buyer, Wall Street’s “smart money” is likely to follow suit. Against this backdrop, fixed income securities and bond substitutes such as high dividend paying utilities and absolute return hedge funds are substantially overpriced and are not likely to produce attractive returns going forward.
This expectation of a reversion to the mean for interest rates helped 2021 performance, though not as much as we had hoped. The yield on the U.S. 10-year Treasury did indeed increase from +0.92% at the beginning of the year to +1.52% at year-end. An underreported story was the poor performance of bonds last year. The Barclays Aggregate Index declined -1.67% for the year ending December compared to a return of +28.71% for equities as measured by the S&P 500. Interest rates have continued to climb in 2022 with the 10-year Treasury at +1.79% as we go to print. This move higher in rates has contributed to our good, early start to 2022. The Goldman Sachs Group, Inc. (NYSE:GS) jumped +47.59% for the year and +1.73% in the quarter.”
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