With the announcement on Thursday that Goldman Sachs will pay a record $550 million to settle with the Securities and Exchange Commission on civil claims that it misled investors, financials analyst Dick Bove said that the company’s stock is a buy.
“I think that Goldman Sachs is one of the best companies ever created in the United States,” Bove, an analyst at Rochdale Securities, said on CNBC. (Read: Settlement Is Win for Goldman Despite Record Fine)
"It really understands its businesses and that it operates them properly," he said.
"And if you believe that money supply over time constantly goes higher—and money of course is the raw material of this company—then you have a company whose raw material continues to grow, who handles that raw material better than any other company in the world, who ultimately is going to benefit by the expansion of the world financial system. Why wouldn’t you want to own that stock?”
“You should own that stock heavily,” he emphasized. (Investors seemed to echo his sentiment. See: "Goldman Shares Surge on News of SEC Settlement")
The stock had suffered when the SEC first filed the complaint against Goldman Sachs in April, Bove said, but other news events, such as the oil spill in the Gulf of Mexico have pushed Goldman out of the headlines.
“This whole thing is now ancient history,” said Bove. “Nobody cares about it anymore.”
Neither Bove nor his company hold significant numbers of shares in Goldman Sachs.