All you need to Know
Goldman Sachs raised their Google price target to $620.
They see 20% upside to that year-end target and are bumping EPS estimates 2%-4% for this year and next. Better than expected margins will likely lead to free cash flow generation above previous street expectations. Blah Blah Blah.
Why does Goldman’s research get so much mindshare these days? I worked at a shop that was covered like a wet blanket by the Street and never considered their work anything special. Sure, they have long been the underwriter of choice. But they routinely make terrible calls, just like the rest of the Street. Goldman dominates many things...equity research is not one of them in my mind. I would rather get plugged into a good analyst at a boutique if I need the sell-side to hold my hand. ‘Nuff Said.
Google’s stock is reasonably inexpensive here after absorbing months of multiple compression and underperforming a ripping tape. It held technical support levels around $440 and Eric Schmidt once again has some spring in his step:
“The global growth of our core search and ads business and our focus on building our partnerships drove our strong results in the quarter,” said Schmidt in a post-close press release. “We continued to expand our worldwide footprint, adding important new partners and growing our platform to increase our ability to deliver targeted and measurable ads. The ongoing expansion of our network allows us to improve the user experience through new opportunities and programs. The Street.com
More importantly, the weather is finally glorious on the East Coast. Curt Schilling is on the mound tonight against the Yankees. And The Lash will be back with another Entourage piece for lunch.
What else do you need to know?
----------------------------------------------------------------------------------------------------------
The content contained in this blog represents the opinions of 1440 Wall Street. This commentary in no way constitutes a solicitation of business or investment advice. It is intended solely for the entertainment of the reader, and the author. No Positions
Where’s the Alpha, Goldman?
In the late 1980’s George Soros gained notoriety as the best global macro hedge fund manager. His son often recounted stories about how George traded off his “gut feel”; sometime a pain in his back would lead him to place massive positions.
Call it intuition. Or sixth sense. But those days are long gone.
Today quants rule. And Goldman Sachs is the 800 pound gorilla. It appears they will soon overtake JP Morgan as the largest hedge fund manager in the U.S., despite lousy numbers in their flagship Global Alpha fund.
Wall Street Compensation
You are probably as weary about reading about Blackstone as we are. But this comparison is worth perusing, and we would expect all newly-minted MBA’s to take note...after all they are all about the money.
March 23 (Bloomberg)—Blackstone Group LP employees generate almost nine times more earnings than their counterparts at Goldman Sachs Group Inc., Wall Street’s most-profitable investment bank.
Each of New York-based Blackstone's 770 workers produced an average of $2.95 million in net income last year, according to documents filed yesterday with the U.S. Securities and Exchange Commission. At Goldman, the world's biggest securities firm by market value, the mean was about $360,000 in 2006. Blackstone earned $2.27 billion in 2006, 71 percent more than a year earlier. Money-management fees were $1.12 billion and investment gains totaled $7.59 billion, as the firm's private- equity funds returned more than 20 percent and its real estate investments almost doubled.Homebuilders For Sale
We have been busy with some work around here...and will soon roll out a few updates to this site.
But money never sleeps. The meltdown in the sub-prime sector certanly caught our attention and it is an opportune time to check in with our favorite homebuilding analyst...who has not really changed his tune since we last spoke. He might be looking for an oversold rally, but that is about as constructive as he will get on the names.
Wayne Nef pens daily research, primarily for hedge fund clients at Sniper Research...
Here is an excerpt from early December…
