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Ahead of Earnings, Buy Goldman or Stay Away?


On a day in which financial stocks posted mixed performance, the “Fast Money” traders looked ahead to Goldman Sachs ahead of earnings, which it releases Wednesday.

“If you take a look at what earnings estimates have done, they have been ratcheted way, way down along with the price on Goldman,” said Patty Edwards of Trutina Financial. “I am not a believer in the bigger banks or even anything other than maybe a super regional, and I haven’t even made myself buy that yet.”

Edwards said she would be staying away from Goldman Sachs.

“I think someone who is a little more nimble than me might be able to get in there and play it on a bounce,” she said. “I don’t like the idea of what’s coming out of the trading side of this, though.”

Goldman shares closed at $97.68, down 1.29 percent. The company is scheduled to report earnings early Wednesday.

Trader Anthony Scaramucci said although he had recommended Goldman stock at $20 higher, he liked it now.

“At $120 a share book value and a fantastic management team buying back stock in a prodigious way, this company’s going to move higher in the next six months,” he said.

Josh Brown of Fusion Analytics dismissed a rise in financial stocks as a rally in a bear market.

“They’re all head fakes, every single one of them,” he said. “Every time we get either a short squeeze or a semi-decent quarter, you get this 6½ percent pop. It’s only suckers buying in. There’s distribution almost immediately after. I don’t want to own a financial that’s paying at least a 3 percent dividend yield. None of the big banks can or will in the foreseeable future.”


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For “Fast Money” pro Joe Terranova, the story was really about managing expenses.

“I don’t want to own Citi. I don’t want to own Bank of America,” he said. “I don’t know the expense story, and I think in 2012 that’s going to be critical.”

Jon Najarian of OptionMonster.com noted that XLF, the financial ETF, has been steadily moving toward $14 per share. The ETF saw a 10 percent increase in the past month.

“People have optimistic outlook for the financial sector, at least for the short-term,” he said.

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Trader disclosure: On Jan. 17, 2012 , the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders: Terranova is long V; Terranova is long CSCO; Terranova is long TRLG; Terranova is long JNPR; Terranova is long DECK; Terranova is long NFLX; Terranova is long XOM; Terranova is long SBUX; Terranova is long AXP; Terranova is long EMC; Terranova is long MUB; Terranova is long IBM; Terranova is long UNG April $5 puts; Scaramucci is long GOOG; Scaramucci is long JPM; Scaramucci is long GS; Scaramucci is long IBM; Edwards is long PM; Dicker is long Vale; Dicker is long CHK

For Anthony Scaramucci
Anthony Scaramucci is one of 8 national finance chairs for Mitt Romney campaign

SkyBridge Capital Is A Fund Of Funds Manager

Scaramucci held a fundraiser for Mitt Romney and contributed to the Romney campaign

For Patty Edwards
Trutina is long Apple (AAPL)

Trutina is long SPDR Gold Trust (GLD)

Trutina is long MSFT

Trutina is long EBAY

Trutina is long T

Trutina is long INTC

Trutina is long PM

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Market Maker: JPMS makes a market in the stock of Intel.

The following analysts (and/or their associates or household members) own a long position in the shares of Intel.: Shaon Baqui.

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