Great Call on Goldman Sachs! What's Next?

There's no doubt that it won't be business as usual at Goldman Sachs (NYSE:GS) as it becomes a commercial bank. On the bright side, the company will have a nice new source of safer funding. At the same time, though, it will no longer be able to lever itself up like leverage is going out of style.

Still, commercial bank or not, there's still a lot to like about Goldman, from its enviable culture to its freakishly smart employees. OK, its connections with heavy hitters in D.C. don't hurt either. Warren Buffett certainly seems to think there's something to like -- Berkshire Hathaway (NYSE:BRK-A) (NYSE:BRK-B) invested $5 billion in Goldman. Of course, who wouldn't like the 10% preferred stock he got, not to mention the below-market warrants?

Though Goldman is only a three-star stock on CAPS (out of five), there are more than 4,000 members who think the stock will outperform the rest of the market. Of all those bulls, though, none has been on target with Goldman like tengrandchicago. Starting in June of this year, tengrandchicago has made four outperform calls on Goldman, has been correct all four times, and has racked up 88 points on the stock for his troubles.

tengrandchicago is one of CAPS' All-Stars -- players with a rating of 80 or greater -- and he has managed a stock-picking accuracy of 66% on his calls while racking up nearly 70 points. Goldman hasn't been his only great call. Here's a look at a few of his other prescient picks:

Data from CAPS.

So what is this investor looking at these days? Here are a few of his most recent calls on CAPS:

Data from CAPS.

While not all of these picks may pan out, they could be a good place to start some further research. I decided to take a closer look at Nokia.

What do investors see in Nokia anyway?
Though tengrandchicago had nothing to say about his Nokia pick, he did mention that he picked Goldman because he saw a peak of pessimism. The strategy may not have been far off on Nokia as well -- after all, the stock has been knocked down 60% from its 52-week high and is trading at less than eight times forward earnings expectations.

The recent pessimism around this cell-phone maker has been driven by competition from the likes of Apple (NASDAQ:AAPL) and Research In Motion (NASDAQ:RIMM) and their fancy-schmancy smartphones, as well as the all-too-familiar fears of a global economic slowdown. But Nokia has been making moves of its own. In late 2007, the company bought out digital map specialist Navteq, and more recently it created the Symbian Foundation to help further development of its mobile software.

What catches my eye about the situation, though, is the company's financial performance. Growth over the past few years has been strong, and the company has managed to turn all of its earnings -- and then some -- into cash. Since the company has relatively little need for capital spending, that cash has been making its way back to investors in a big way in the form of dividends and share buybacks. In uncertain times like these, Nokia's 4.4% dividend yield sounds pretty good to me.

And with my outperform rating on Nokia, I become one of the 2,100-plus CAPS members who are bullish on the stock. That throng of supporters includes sumbawa, a CAPS member who rated Nokia an outperformer at the end of September and said:

After today's fall, Nokia's share price is back to where it was three years ago. Crazy. Profits are about twice what they were then. OK, margins are declining a bit but the company has about 40% global market share in mobiles. They has one of the world's greatest brands and their financials are excellent. They won't be needing a line of credit anytime soon. In summary, a stock that has gone from misunderstood to bargain bin.

So what's your take on Nokia? Is there more downside ahead, or is it ready to rally along with oil and gas prices? Get in the action by clicking over to CAPS. CAPS is absolutely free, and there are already more than 115,000 stock pickers chipping in to find the best stocks out there.

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