Investors were over-enthused about these numbers because of JPMorgan’s numbers, “anybody who is buying this stock based on one quarter’s results should get out of it,” he said.
“I would argue that (Goldman’s earnings are) stronger than JPMorgan’s if you look at the whole company,” with JPMorgan doing badly on the traditional bank side of the business, he said.
“There is no reason not to be buying (Goldman) at this time,” he said.
M&A Boom on the Horizon
The investment banking market that Goldman is serving “is now growing fairly rapidly,” Bove said.
“In 2010 we’re likely to see the biggest explosion in mergers and acquisitions that we’ve ever seen and Goldman will be a main participant in that,” he said.
“The fact is that (Goldman’s third-quarter earnings are) always below the second quarter number because investment banking activity dries up in the summer,” Bove added.
People don’t want to bring stocks to market in the summer season and trading activity cools down because of vacations, he said.