4 Reasons Goldman Sachs Is a Buy
When the market offers you the chance to buy an industry-leading business with an iconic brand on sale, it never hurts to take a closer look. One such example in the current market is renowned financial services giant Goldman Sachs (NYSE: GS), whose shares are down 13% year to date and 22% from their 52-week high.
Let's start by looking at one of the main reasons Goldman shares have declined.
Shares sold off in February because the storied investment bank missed earnings estimates in its most recent quarter. The primary culprit for the miss was a 23% increase in operating expenses year over year, driven largely by increased pay and compensation for employees.
While it's not ideal to see a large increase in operating expenses, I think Goldman deserves some slack here, because like many other businesses it needed to raise pay to retain employees amid the shift to remote work while the Great Resignation led to unprecedented employee turnover and a sea change in the employer-employee relationship. I can understand a company like Goldman paying up to retain talented workers in a competitive market rather than to be in the unenviable situation many other companies find themselves in, struggling to find enough workers and having trouble keeping the ones that they have.
Furthermore, if this was a one-time blip in an unprecedented year, then this could be a good buying opportunity as the company gets expenses and earnings back on track.
Source Fool.com
