Goldman Sachs (GS) — This Dow 30 component is one of the world’s leading investment banking and securities firms. It earned $15.46 per share in 2013, and the consensus estimate is $15.75 in 2014 and $17.03 in 2015. S&P’s 12-month price target is $195 and is based on a multiple of 12.5X their 2014 EPS estimate of $15.65.
I last recommended GS on Dec. 3, at about $169, noting that it broke to new highs on a day when most stocks took a breather. I set a trading target of $180.
Not only did GS break out, but on Jan. 6, it exceeded my trading target, topping out above $181. Profit-taking and the January sell-off drove the stock to just under its 200-day moving average.
Now at about $164, GS appears to have bottomed just above its intermediate trendline, and in the last two days, it closed above its 200-day moving average. Its MACD indicator is close to issuing a buy signal.
Buy GS at the market with a trading target of $175. Investors should consider this premier blue chip as a long-term purchase.