GO
Loading...

5 Reasons To Buy Goldman, Right Now!

Thursday, 22 Apr 2010 | 5:29 PM ET

When it comes to playing Goldman , widely followed strategist Hilary Kramer says fortune favors the bold.

As you may remember from our past visits with Kramer, she’s bearish on the market broadly. But she definitely feels there’s opportunity to profit – you just have to know where to look.

”The trick is to find undervalued stocks in a market that’s over extended like this one is," she explains.

And right now, Kramer says Goldman is seriously undervalued stock.

In fact, she’s brought us 5 reasons to buy the stock right here and right now. Here’s her thesis:

Ahead of the broadcast Kramer told our producers she believes the civil charges Goldman now faces were politically motivated.

And she's not alone. Douglas Sipkin of Ticonderoga Securities told us much the same earlier in the week.

The thesis here is that although Goldman is the government’s scapegoat now, soon all of Wall Street will share in its pain. ”The more this becomes an industry issue – as opposed to a Goldman issue – the less bad it will be for Goldman on a relative basis," says Sipkin.

Negative Technicals for Goldman
It's business as usual for Goldman Sachs. Insight with Hilary Kramer, A&G Capital.

What does that mean for investors?

Although Goldman is the only stock being punished right now – soon the playing field will level out. And that brings us to Kramer's reason #1 – Goldman is oversold, she says.

But for Kramer long Goldman is more than a political bet. She also like Goldman for 4 other reasons. They follow:

- Fundamentals are exceptionally strong
- Company remains very well positioned
- Earnings power is intact.
- Goldman could repurchase $3.5 bln. in stock through end of 2010

"It trades at 1.3 times book and it should trade at 1.6 times book," says Kramer.

As a result Kramer beleives Goldman could trade as high as $210 by the second quarter of 2011. "I expect at least a 30% return in a 12 month time period," she says.

Sipkin also raised his estimates, he sees 28% upside from here.

What do you think? We want to know!










Click below to check out Kramer's other recent picks:

> 2 Stocks That Should Be Correction Proof

> 2 Energetic Stocks In This Tired Market

> 2 Under-Valued Stocks In An Over-Extended Market





______________________________________________________
Got something to to say? Send us an e-mail at fastmoney-web@cnbc.com and your comment might be posted on the Rapid Recap. If you'd prefer to make a comment but not have it published on our website send those e-mails to fastmoney@cnbc.com.

Trader disclosure: On Apr 22, 2010, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Adami Owns (INTC), (GS), (C), (AGU), (MSFT), (NUE), (BTU); Finerman's Firm Is Short (IWM), (MDY), (IJR); Finerman's Firm Is Long S&P Puts; Finerman Owns (AAPL); Finerman's Firm Owns (BAC), (BAC) Calls; Finerman Owns (BAC) Preferred; Finerman Owns (GOOG); Finerman's Firm And Finerman Own (JPM); Finerman's Firm Owns (MSFT); Finerman's Firm Owns (PLCM); Finerman's Firm And Finerman Own (WFC) Preferred; Finerman’s Firm Owns (TJX); Finerman's Firm Owns (KFT), (WMT), (IBM); Terranova Owns (AXP), (TER), (SWN), (XCO), (HES); Terranova Owns (C) May Calls; Terranova Is Short Gold; Terranova Is Short (BRE); Karabell Owns (ADSK); Grasso Owns (DYN), (LPX), (ASTM), (ABK), (BAC), (BGP), (C), (CVGI), (JPM), (NEM), (PRST), (PFE), (BA), (T), (CSCO); Jon Najarian Owns (SYNA); Jon Najarian Owns (BAC) Preferred; Jon Najarian Owns (C) Preferred; Jon Najarian Owns (CME); Jon Najarian Owns A Seat On CME; Jon Najarian Owns (GS), Is Short (GS) Call; Jon Najarian Owns (JPM) Preferred; Jon Najarian Owns (LPX) Call Spreads; Jon Najarian Owns (MS), Is Short (MS) Calls; Jon Najarian Owns (MSFT) Puts; Jon Najarian Owns (QCOM) Puts; Kaminsky Owns (EXPD); Iuorio Owns (C), (GOOG), (GLD), (FXC); Iuorio Is Long Volatility In S&P Futures

For Joe Terranova
Terranova Works For (VRTS)
Terranova Is Chief Market Strategist Of Virtus Investment Partners, Ltd.
Virtus Investment Partners Owns More Than 1% Of (XLU)
Virtus Investment Partners Owns More Than 1% Of (IGE)
Virtus Investment Partners Owns More Than 1% Of (XLY)
Virtus Investment Partners Owns More Than 1% Of (DBV)
Virtus Investment Partners Owns More Than 1% Of (XLP)
Virtus Investment Partners Owns More Than 1% Of (XLB)
Virtus Investment Partners Owns More Than 1% Of (XLV)
Virtus Investment Partners Owns More Than 1% Of (XLI)

For Steve Grasso
Stuart Frankel And Its Partners Own (CUBA)
Stuart Frankel And Its Partners Own (GERN)
Stuart Frankel And Its Partners Own (HSPO)
Stuart Frankel And Its Partners Own (MERC)
Stuart Frankel And Its Partners Own (NWS.A)
Stuart Frankel And Its Partners Own (NXST)
Stuart Frankel And Its Partners Own (NYX)
Stuart Frankel And Its Partners Own (PDE)
Stuart Frankel And Its Partners Own (PFE)
Stuart Frankel And Its Partners Own (PRST)
Stuart Frankel And Its Partners Own (RDC)
Stuart Frankel And Its Partners Own (TLM)
Stuart Frankel And Its Partners Own (XRX)
Stuart Frankel And Its Partners Own (SDS)
Stuart Frankel And Its Partners Are Short (QQQQ)
Stuart Frankel And Its Partners Are Short (CL)
Stuart Frankel And Its Partners Are Short (AAPL)

Dennis Gartman
Funds Managed By Dennis Gartman Are Short Crude Oil
Funds Managed By Dennis Gartman Are Short Euro, Sterling, Yen
Funds Managed By Dennis Gartman Are Long Gold

For Hilary Kramer
Kramer Is A Client Of Goldman Sachs


CNBC.com with wires

  Price   Change %Change
GS
---

Featured

Contact Fast Money

  • Showtimes

    Halftime Report - Weekdays 12p ET
    Fast Money - Weekdays 5p ET
  • Melissa Lee is the host of CNBC's “Fast Money” and “Options Action.”

  • Scott Wapner is host of the "Fast Money Halftime Report," which airs weekdays from 12 p.m. to 1 p.m. ET.

  • Guy Adami is a contributor on CNBC's "Fast Money." He also is managing director of stockMONSTER.com.

  • Najarian, the "Pit Boss," is cofounder of optionMONSTER.com, a news site for options traders.

  • Finerman is president of Metropolitan Capital Advisors, Inc., a company she co-founded.

  • Founder of EmergingMoney.com

  • Chief Market Strategist for Virtus Investment Partners & CNBC Contributor

Halftime Report