In this video, Matt Koppenheffer outlines three areas to watch with Goldman Sachs. First, the economy. Goldman Sachs is an investment bank, and much of its business comes from investing as well as mergers/acquisitions, equity, and debt offerings. If the economy tanks, Goldman Sachs revenues will likely decline. Second, the European economy and the PIIGS countries. Goldman Sachs has limited exposure to these countries, but continued debt problems in the PIIGS countries could be a drag on the rest of the European economy. Lastly, executive compensation. Goldman Sachs pays its top brass well, but its expense ratio is actually lower than those of its competitors in this regard. If Goldman Sachs has to up the ante to attract top talent, that could signal problems with the company.
During the financial crisis, Goldman Sachs did so well pivoting to avoid the worst of the fallout that it had to downplay its success to duck public ire and conspiracy theories. Today, Goldman is still arguably the powerhouse global financial name, and yet its stock trades at a valuation of less than half what it fetched prior to the crisis. Does this make Goldman one of the best opportunities in the market today? To answer that question, I invite you to check out The Motley Fool's special report on the bank. In it, Fool banking expert Matt Koppenheffer uncovers the key issues facing Goldman, including three specific areas Goldman investors must watch. To get access to this report, just click here.