Posts for Ticker ‘Goldman Sachs’

Goldman Sachs SPAC IPO Killed (GS)

Liberty Lane Acquisition Corp. was going to be the first real special purpose acquisition company, or SPAC or blank check company, from Goldman Sachs Group Inc. (NYSE: GS).  The key word in there is "WAS." 

After the close of trading today, Liberty Lane announced that it decided it would not proceed with its planned IPO at this time.  You can guess the reason: due to market conditions.  We covered Liberty Lane as "Goldman Sachs’ first real SPAC IPO" in full detail on its filing date. 

The flow of SPAC IPO’s has dried up significantly, and some are even closing and returning funds.  But there was another issue in the Liberty Lane SPAC IPO.  Goldman Sachs has a premium name, and it wanted premium terms.  Each unit was "one share and a half of a warrant," which is less than the traditional "one share and one warrant" per unit in almost every other SPAC out there.

It would have been nice to see how this was going to pan out, although this one had the odds stacked against it after such a large amount of SPAC’s are still in the hopper and as many are having a hard time getting to market because of current conditions.

You can join our open email distribution list to hear about other issues IPO’s, SPAC’s, in secondary offerings, private equity, and special financings.

Jon Ogg
May 28, 2008

Posted on: May 28, 2008 – 5:14 pm in IPOs, , ,

Goldman Sachs Conviction Buy List Changes (CI, WLP, CNH)

Goldman Sachs is making a change to its CONVICTION BUY LIST this morning.  The firm is adding CIGNA (NYSE: CI) and dropping WellPoint (NYSE: NYSE: WLP) from the list.  Both stocks are still maintained as officially being BUY rated there, but Goldman Sachs sees a near-term opportunity in CIGNA shares.  In fact, the 6-month price target on CIGNA gives an implied upside of 30%.

CNH Global N.V. has also been booted off of the CONVICTION BUY LIST, although that is because of a stop-loss feature.  The firm is maintaining a BUY rating and says it is not a seller at current levels.  The stock is down some 22% since its addition to the list on November 27, 2007.

Jon C. Ogg
February 8, 2008

Posted on: February 8, 2008 – 8:13 am in Analyst Calls, , , , , ,

Goldman Sachs Conviction Buy List Changes In Gold Sector (ABX, FCX)

Goldman Sachs is making a key change in the gold sector this morning.  The investment banking giant is adding Freeport-McMoRan Copper & Gold (NYSE: FCX) to the Americas Conviction Buy List.  This stock is replacing Barrick Gold (NYSE: ABX) on the Americas Conviction Buy List.

FCX is noted as being down over 15% year to date and being inexpensive based on a 49% upside from current prices to Goldman’s 12-month $129.00 price target.  Its leverage in copper is perhaps one of the more favorable issues according to the note, and Goldman notes that it believes copper consumption will be least affected of the base metals in a Western economic slowdown.

Barrick’s removal from the Americas Conviction Buy List comes on the heels of strong performance, which is actually up 29% since being added to the list on November 27, 2007.  Barrick is also up some 90% since April 2006 when it was first given a Buy rating.  Goldman Sachs is still maintaining its official Buy rating on Barrick along with a $66 price target.  The firm believes this was the beneficiary of higher gold prices over $900/ounce as the stock outperformed mining and metals peers.  It also believes this is a top gold investment vehicle.

This call looks more like a relative value call based upon performance and value, and it could even be an implied pairs trade in the sector to some.

Jon C. Ogg
January 31, 2008

Posted on: January 31, 2008 – 7:56 am in Analyst Calls, Metals, , , , ,

A New Goldman Sachs Index? You Bet Your Life (GS)

Goldman Sachs Group, Inc. (NYSE: GS) has launched the first index that will allow the market to measure, manage, and trade exposure to longevity and mortality risks in a standardized, transparent, and real-time manner. 

Longevity and mortality are the risks that realized lifespan differs from expected lifespan, creating an economic consequence, often a price change in an asset or liability.  Holders of mortality risk — typically institutions such as insurance carriers and reinsurers — are economically exposed to a decrease in lifespan (i.e. if you die 4 years after you sign up for a $200,000.00 life insurance policy), while holders of longevity risks (i.e. if you live to 100 instead of 78 and on a pension that an employer must pay)– pension funds, annuity writers, the social security trust fund or life settlement investors — are exposed to an increase.

QxX.LS, the first in an expected series of indices, will be a representative sample of the US SENIOR INSURED population over the age of 65. The initial index will reference a pool of 46,290 de-identified lives and is based on a population designed to address risks to which major market participants are exposed and is independently tracked monthly, providing real-time publication of mortality information.

Published index rules and trading calculators are available on the QxX website at http://www.qxx-index.com, ensuring observability and transparency. Hedge funds, banks and asset managers with existing positions in the cash longevity market (pensions, viatical settlements, defined benefits, etc), or those with an interest in gaining synthetic exposure to this uncorrelated risk class, will be able to use the index to either hedge existing exposure or to initiate investments.

If you have ever heard of viatical settlements or if you know someone who is over 80 and healthy still clipping a pension on top of social security, then you’ll understand that this may actually be the first of many such measurements.  Prior to that, an actuarial had to use historical data that isn’t always complete. 

This may sound heartless but it’s a great start for the long-term strength of some of these financial institutions.  Should you expect more of these index variations?  You bet your life.

Jon C. Ogg
December 14, 2007

Jon Ogg can be reached at jonogg@247wallst.com; he does not own securities in the companies he covers.

Posted on: December 14, 2007 – 12:29 pm in Index, ,

Goldman Sachs Oil Call Overshadows ExxonMobil Earnings (XOM, SLB, BP, BHI, TSO, XLE, OIH)

Goldman Sachs may not be reversing its entire bullish stance on oil after oil traded over $93.00 per barrel on Monday, but it is recommending some old fashioned profit taking.  Goldman Sachs noted specifically that it is not necessarily calling a top here, but it is encouraging to take some profits and lock-in some gains.  Here was the prior equity analyst call on oil names out of Goldman Sachs.

At the end of last week, 24/7 Wall St. was looking at ExxonMobil (NYSE:XOM) ahead of earnings and we noted that its chart was not indicative of a great earnings report being priced-in.  Schlumberger Ltd. (NYSE:SLB) has been a disaster since its earnings were greeted with major selling, and BP (NYSE:BP) already noted that Q4 was going to be ugly.  The stock was not following oil prices and the price at the pump according to gasbuddy.com was not following the per barrel price trend of black gold.  Naturally, there is a "be careful what you wish for, you might get it" lesson here: yesterday at the pump the price was back over $3.00 per gallon.

This report isn’t entire out of line with Goldman Sachs’ recent lifting of its Super-Spike price band where it noted the possibilities under extreme circumstances for $135/barrel and $4.50/gallon at the pump.  Today’s call looks at a downside risk of $80/barrel at the end of Q1 2008.

You can bet this won’t change the stance of many oil bulls.  Ken Heebner of CGM is very bullish on oil properties and T. Boone Pickens recently called for $100/barrel.  Jim Cramer even went on the line and noted some key oil takeover names in Canadian Oil Sands Trusts.

The truth is that the fundamentals right now do not seem to justify the current prices, but 24/7 Wall St. still believes that $100 can easily be hit based upon the trading patterns.  There has still yet to be a single net delivery miss in and to the U.S.  If a net delivery miss were to occur you can imagine what the trading reaction will be, regardless of the price.  Traders are in charge of oil, just ask Tesoro’s (NYSE:TSO) analyst/economist that was saying just last week how the fundamentals in today’s oil markets should have oil in the $60’s rather than the $80’s or $90’s.

We still wonder if Baker Hughes Inc. (NYSE:BHI) is going to make an acquisition after that last filing for it to raise $2 Billion in cash, which has been a signal in the past since it does not need cash.

Oil is down almost $2.00/barrel at $91.60 on last look.  The Energy Select Sector SPDR (AMEX:XLE) is down over 2% to $75.47 (year range $53.89 to $78.50) and the Oil Services HOLDRs (AMEX:OIH) is down 2.8% at $188.28 (year range $125.81 to $204.62).

Jon C. Ogg
October 30, 2007

Posted on: October 30, 2007 – 12:37 pm in Analyst Calls, Earnings, Oil & Gas, , , , , , , ,

Wal-Mart Catches A Goldman Sachs Upgrade (WMT)

Wal-Mart (NYSE:WMT) has been upgraded by Goldman Sachs in a late afternoon research call today.  The bulge bracket firm raised Wal-Mart’s rating from a Neutral to Buy.  Barron’s also ran an article mid-day with a note citing "Wal-Mart Will Rise Again."   Interestingly enough, the company issued a release noting that the head of Wal-Mart’s outreach to environmental groups was leaving the company.

Shares ticked up on this news late in the day.  Shares had been down around $45.75 and then popped up to $46.35 before settling into the $46.00 area right at 4:00 PM EST for an unofficial close.  Wal-Mart’s 200-day simple moving average of $46.73 looks to be adding some resistance.

Jon C. Ogg
October 17, 2007

Posted on: October 17, 2007 – 3:11 pm in Analyst Calls, ,

Microsoft Earnings: Goldman Sachs Must Know Something (MSFT)

Goldman Sachs has one of the more premiere research shops for the bulge bracket firms on Wall Street and investors look to its "Conviction Buy List" with regularity.  It might not seem odd that Goldman Sachs added Microsoft (NASDAQ:MSFT) to its Americas Conviction Buy List on a regular day.  But when it is about a week before earnings and the day Intel and others are reporting it makes it very difficult not to wonder if the analyst didn’t get some insight that might not be available elsewhere.

Goldman Sachs’ note from analyst Sarah Friar says that it expects upside to Microsoft’s first quarter results based upon the numbers out of Halo 3, the aQuantive buyout, currency benefits, and new product cycles like Office 2007 and Windows Server 2008 driving what Goldman estimates at 12%+ growth into fiscal 2009.  Goldman Sachs also noted that the current valuation remains at a significant discount to the software group and in-line with S&P peers, while sentiment is "almost overwhelmingly negative."  The summary concludes that this will take the stock higher on a better quarter.

Another wild card here is that these notes are no longer from Rick Sherlund, the former Goldman Sachs analyst that was considered the honcho of all analysts that covered Microsoft.  Microsoft was removed from the Conviction Buy List back on April 10, 2007 and shares closed at $28.21 that day.  Shares are up 1.2% today at $30.42.  Estimates were already raised last week and Goldman Sachs has a $37 target for the stock.  It isn’t our take that the analyst got anything secret, but maybe some solid research came in ahead of these other tech earnings. There is either some performance chasing going on, or there is some strong insight here from investigative research.

Jon C. Ogg
October 16, 2007

Posted on: October 16, 2007 – 1:05 pm in Analyst Calls, Software, , , , , , , ,

Goldman Sachs Pairs Trade: Long Maxim, Sell Intersil (MXIM, ISIL)

Maxim Integrated Products (MXIM) has found itself in a strange predicament over its listing status, but Goldman Sachs doesn’t seem to care.  Maxim (MXIM) is being added to Goldman Sachs’ Conviction Buy List, although it says there is no change to above-consensus estimates or to the 14% projected upside at a $33 price target.  Goldman is adding Intersil (ISIL) to its Conviction Sell List, although it already has a sell rating on the shares.  Goldman is not changing its $29 target with 13% downside.

Interestingly enough, the basis for this call appears to be a pairs trade (arbitrage on price moves) with a LONG MXIM and SHORT ISIL thesis.  It is based upon valuation gaps of nearly 30% on 2008 P/E ratio estimates and a 50% gap on EBITDA projections, despite estimates of 11-13% earnings growth for both.  The 20% underperformance of MXIM along with the delisting are looked at for a reversion.  Solid trends are also noted at both companies, although Goldman Sachs noted that this looks priced in at ISIL based upon positive pre-announced earnings (Goldman believes this is not priced in on MXIM).  There is even a note that a possible market inefficiency exists due to Thomson using GAAP EPS for MXIM and non-GAAP EPS for ISIL.

Jon C. Ogg
October 4, 2007

Posted on: October 4, 2007 – 7:30 am in Analyst Calls, Semiconductor, , , ,

Emerson Added to Goldman Sachs Conviction Buy List (EMR, DHR, TYC)

Goldman Sachs has raised its "Neutral" rating on Emerson Electric (NYSE:EMR) and added it to the Conviction Buy List.  Goldman based the upgrade on positive earnings outlook and an attractive risk versus rewards analysis.  Its 2008 and 2008 estimates were raised and it now sees 12% upside to the $52.00 prior target with a new target set at $58.00.  Goldman Sachs also noted that Emerson is one of its six well positioned multi-industry primes at this stage of the cycle and lists catalysts as upward earnings revisions and even lists M&A in the fold.  As a "flight from the dollar" this works as well, because Goldman Sachs lists 52% of sales being non-U.S and noted exposure to oil and gas.

On the reverse, Goldman Sachs downgraded Danaher Corp. (NYSE:DHR) to Neutral and downgraded Tyco International (NYSE:TYC) to a "SELL" rating.

Emerson Electric shares are trading up over 2% pre-market at $52.75.  Danaher shares are down 1% at $82.00 pre-market and Tyco shares are trading down 1.5% at $44.00 in pre-market activity.

Jon C. Ogg
September 27, 2007

Posted on: September 27, 2007 – 7:57 am in Analyst Calls, , , , , ,

Cramer Back On The Goldman Sachs Wagon (GS, BSC)

On tonight’s MAD MONEY on CNBC, Jim Cramer wanted to review how all brokerage firms aren’t cut from the same cloth.  The broker to own is the one Cramer always touts as the best, and that is Goldman Sachs (NYSE:GS).  After this last quarter reports from brokers this week from the brokerage firms, he thinks it is quite clear that Goldman Sachs is the winner.

With a 50/50 rate cut Cramer thinks it is time for brokers and time for Goldman Sachs with $6.13 versus $4.35 estimates.  They even were short mortgages and made money.  Cramer still thinks this is worth $300.00 this time next year and is the best one to own.

As far as Goldman Sachs here are some other pertinent tid-bits to contemplate:
They were a TOP PICK FOR 2007 by Cramer
Even with an "Alpha Fund" hit in the news, they won
The bets were on them ahead of the report
The stocks acted weird, but the report was better than Bear Stearns (NYSE:BSC)
Who else can call $135/barrel in oil and get away with it in a "Super-Spike" possibility?

Jon C. Ogg
September 20, 2007

Posted on: September 20, 2007 – 5:19 pm in Brokerage Firms, Cramer, , , , ,

Lehman Defying Financial Market Malaise (LEH, GS, BSC, MS)

Lehman Brothers Holdings Inc. (NYSE: LEH) has just reported net income of $887 million, or $1.54 per common share (diluted), for the third quarter ended August 31, 2007.  This does represent a drop of 3% and 2%, respectively, from net income of $916 million, or $1.57 per common share (diluted). First Call had estimates at $1.47 on EPS.

Net revenues (less interest expense) for the third quarter of fiscal 2007 were $4.3 billion, an increase of 3% from $4.2 billion reported in the third quarter of fiscal 2006 and a decrease of 22% from the record $5.5 billion reported in the second quarter of fiscal 2007.  First Call was also $4.3 Billion in estimates.

Chairman and Chief Executive Officer Richard S. Fuld, Jr.: "Despite challenging conditions in the markets, our results once again demonstrate the diversity and financial strength of the Lehman Brothers franchise, as well as our ability to perform across cycles. For the quarter, we reported record net revenues in Investment Management, and our second highest net revenues in both Investment Banking and Equities Capital Markets. In addition, more than half of our net revenues for the quarter came from outside the U.S. We remain focused on delivering significant long term value for our clients and shareholders."

Lehman is warning of substantial valuation reductions in certain portfolios and lower performing assets.  Hedges appear to have offset some of the negatives.  Equity, asset management, cash & derivatives, and investment banking were all bright spots.

Shares are now up 4% pre-market at $61.10, and th 52-week trading range is $49.06 to $86.18.  If the brokers can all somehow manage to do this well considering the environment then there are going to be some relief buyers even more than this pop.  Others reporting this week are Goldman Sachs (NYSE:GS), Bear Stearns (NYSE:BSC), and Morgan Stanley (NYSE:MS).

Jon C. Ogg
September 18, 2007

Posted on: September 18, 2007 – 7:16 am in Brokerage Firms, , , , , , , ,

Pre-Market Analyst Calls (September 18, 2007)

CAM cut to Mkt Perform at Wachovia.
CYPB started as Buy at Citigroup.
DMAN started as Outperform at Credit Suisse.
ENB raised to Outperform at CIBC.
ERTS started as Buy at Goldman Sachs.
ETFC cut to Neutral at Goldman Sachs.
FMC cut to Underperform at Wachovia.
GET started as Buy at Jefferies.
GM cut to Neutral at Goldman Sachs.
HHS cut to Underweight at JPMorgan.
ITW cut to Hold at BB&T.
KWD cut to Neutral at First Albany.
LCAPA started as Outperform at Wachovia.
LMT raised to Buy at Merrill Lynch.
MEND cut to Sector Perform at CIBC.
MYGN started as Hold at Citigroup.
NCI cut to Neutral at Merrill Lynch.
NLY started as Buy at JMP Securities.
ONNN raised to Outperform at Wachovia.
PETD started as Buy at Sun Trust Robinson Humphrey.
RRR raised to Overweight at Lehman.
SRVY raised to Overweight at Lehman.
SSL cut to Neutral at UBS.
VC raised to Neutral at Goldman Sachs.
WBD cut to Neutral at Credit Suisse.
WX started as Neutral at JPMorgan.

Jon C. Ogg
September 18, 2007

Posted on: September 18, 2007 – 7:07 am in Analyst Calls, , , , , , , , , , , , , , , , , , , ,

Goldman Sachs Major Oil Changes (Up To $135 Per Barrel Super-Spike)

This morning Goldman Sachs has made some major changes to its integrated oil and refining universe to reflect new commodity price assumptions, as well as changes in many cost structures ahead.  The overall rating is still listed as "Attractive" for both integrated oil and for refining. 

Goldman Sachs is calling it as now being in Phase 2 of a multi-year "Super-Spike" era.  It says the lower ends of the $50 to $105 per barrel oil and $8 to $15 per barrel USGC refining margin range has not caused demand to fall.  Its base case forecasts now reflect the upper portion of that band with $80 per barrel oil in 2008 and $90 per barrel in 2009.  It also sees refining margins at $14 per barrel in 2008 and $16 per barrel in 2009. 

Goldman Sachs has raised the high-end of its super-spike price range now and lists $135 per barrel of oil as the high-end, $25 per barrel in refining margin, and even lists $4.50 per gallon as the high-end of a super-spike price on gasoline at the pump.  It does clarify that prices may not need to go this high to lower demand, but says that this similarly is not a ceiling.

Goldman Sachs also named a slew of companies we will include in an updated story.  Over the weekend, we noted a scenario that could justify even higher prices than this, and just last week T. Boone Pickens called for higher oil prices without any definitive targets being noted.

Jon C. Ogg
September 17, 2007

Posted on: September 17, 2007 – 7:24 am in Analyst Calls, Oil & Gas, , , , ,

Target Targeting Its Own Targets (TGT)

Target Corporation (NYSE:TGT) shares traded up 1.5% to $62.72 in normal trading today, but shares are up another 2% in after-hours trading. 

The red-dot announced today that it is reviewing potential ownership alternatives for its credit card receivables, which is an asset worth what it says is approximately $7 Billion.  Beyond that, it will re-evaluate its use of debt in its capital structure and its pace of share repurchases. The company said it expects to complete these reviews by the end of December.  It is also declaring its regular $0.14 dividend as well.

The review of its credit card receivables will be focused on the economics of possible alternatives and will include an examination of possible differences in growth rates and credit risk exposure between the current direct ownership model and other possible ownership structures, the cost of debt and equity capital to fund receivables, and current and future liquidity considerations.

Goldman Sachs has been engaged to advise the company in this review to see if it or another financial institution should own its credit receivables.  Target also noted that a sale of any, or all, of the company’s credit card receivables this capital structure review will also include an analysis of the appropriate application of proceeds.  That will include current and future share buybacks.  It will also specifically not consider taking any deliberate actions that would jeopardize its current short-term debt ratings and it expects to maintain the necessary credit profile to preserve our long-term debt ratings within the “A” category.

At $64.30 in after-hours, this gets shares to within about 10% of its yearly high.  The company sounds pretty adamant that it is not going to overextend itself over near-term buybacks that might drop its liquidity and it wants to keep its balance sheet quite clean.

Jon C. Ogg
September 12, 2007

Jon Ogg can be reached at jonogg@247wallst.com; he produces the 24/7 Wall St. Special Situation Investing Newsletter and he does not own securities in the companies he covers.

Posted on: September 12, 2007 – 4:49 pm in Retail, , ,

Goldman Sachs Note Hits EMC & VMware (EMC, VMW)

Goldman Sachs has removed EMC Corp. (NYSE:EMC) from its beloved Conviction Buy List this morning, although the firm is maintaining an official "Buy" rating.  The catalyst for the initial call was VMware (NYSE:VMW) and the research note says this has played out and investors are one step further in understanding the underappreciated value of core EMC.  The note does remain positive that EMC should continue to be bought as more balanced growth, multiple product cycles, and shareholder value initiatives after the partial spin-off of VMware are going to likely keep a bid under EMC shares.  Goldman Sachs also said the 5% gain since adding it on July 31 was higher than the 1.2% gain in the S&P 500; and on an annual basis that EMC has risen over 65% versus just over 12% for the S&P 500.

A lot of this sounds close to our "VMware Conundrum" from the end of August.  Our subscriber alert is no longer under embargo since the IPO is basically a month old now, and here is what we sent to paid subscribers as a way of profiting on the expected Downside in EMC stock right after the VMware opening.  This was where we compared it to a myriad of other major spin-offs, and gave some downside targets for a very short-term trade. Special Situation Investing Newsletter trials are available.

EMC shares are now down over 1% at $19.15 in pre-market trading, and this $19.89 to $20.00 top is starting to look like a harder and harder hurdle to overcome.  VMware shares are down almost 3% at $67.90 pre-market. As a reminder, we gave note about what to expect from other companies ahead of VMware’s VMWORLD 2007 CONFERENCE in San Francisco next week.

Investors still need to read all about VIRTUALIZATION as much as they can.  The underlying growth that is going to occur at VMware AND in the virtualization space, regardless of how that individual tracking stock reacts, is going to be large enough that everyone will want a larger and larger piece.  Citrix Systems (NASDAQ:CTXS) acquisition of XenSource is just one of many forrays where companies are going to do what they have to do to get in, although many companies will have to use the continued ‘partnership route’ rather than making acquisitions.

Jon C. Ogg
September 7, 2007

Jon Ogg can be reached at jonogg@247wallst.com; he produces the 24/7 Wall St. SPECIAL SITUATION INVESTING NEWSLETTER and he does not own securities in the companies he covers.

Posted on: September 7, 2007 – 8:01 am in Analyst Calls, Software, Technology Companies, , , , ,

Goldman Sachs Research Summary (APR 5, 2007)

Stock Tickers: MU, RIMM, YHOO, MCHP, MRVL, CLMS, BEN, BOW, JNS, LM, HBAN, GILD, OSIP, BIIB, MEDI, JNC, CNS, FII, GBL, AB, BLK

This is one of the last research summaries that Goldman Sachs will be issuing before the earnings deluge comes.

The first and foremost call was a Downgrade on Micron (MU) to a Sell from a neutral.  MU is still up pre-market after wider losses, but it was up much more last night.  It sees 17% downside to the stock.

Read More »

Posted on: April 5, 2007 – 7:56 am in Uncategorized, , , , , ,