Goldman Sachs (GS) Boasts Earnings & Price Momentum: Should You Buy?
The Zacks Focus List offers investors a way to easily find top-rated stocks and build a winning investment portfolio. Here's why you should take advan...
Here at Zacks, we offer our members many different opportunities to take full advantage of the stock market, as well as how to invest in ways that lead to long-term success.
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Also included in Zacks Premium is the Focus List. This is a long-term portfolio of top stocks that have all the traits to beat the market.
Breaking Down the Zacks Focus List
If you could, wouldn't you jump at the chance for access to a curated list of stocks to kickstart your investing journey?
Enter the Zacks Focus List. It's a portfolio made up of 50 stocks that are set to beat the market over the next 12 months; each company selected serves as a foundation for long-term investors looking to create an individual portfolio.
Additionally, each selection is accompanied by a full Zacks Analyst Report, something that makes the Focus List even more valuable. The report explains in detail why each stock was picked and why we believe it's good for the long-term.
The portfolio's past performance only solidifies why investors should consider it as a starting point. For 2020, the Focus List gained 13.85% on an annualized basis compared to the S&P 500's return of 9.38%. Cumulatively, the portfolio has returned 2,519.23% while the S&P returned 854.95%. Returns are for the period of February 1, 1996 to March 31, 2021.
Focus List Methodology
When stocks are picked for the Focus List, it reflects our enduring reliance on the power of earnings estimate revisions.
Earnings estimates, or expectations of growth and profitability, come from brokerage analysts who track publicly traded companies; these analysts work together with company management to analyze every aspect that may affect future earnings, like interest rates, the economy, and sector and industry optimism.
Earnings estimate revisions are very important, since investors also need to take into consideration what a company will earn in the future.
The stocks that receive positive changes to earnings estimates are more likely to receive even more upward changes in the future. Take this example: if an analyst raised their estimates last month, they'll probably do so again this month, and other analysts will follow.
Utilizing the power of earnings estimate revisions is when the Zacks Rank joins the party. A unique, proprietary stock-rating model, the Zacks Rank uses changes to quarterly earnings expectations to help investors create a winning portfolio.
There are four main factors behind the Zacks Rank: Agreement, Magnitude, Upside, and Surprise. Each one of these features is then given a raw score that's recalculated every night and compiled into the Rank. Using this data, stocks are classified into five groups, ranging from "Strong Buy" to "Strong Sell."
The Focus List is comprised of stocks hand-picked from a long list of #1 (Strong Buy) or #2 (Buy) ranked companies, meaning that each new addition boasts a bullish earnings consensus among analysts.
It can be very profitable to buy stocks with rising earnings estimates, as stock prices respond to revisions. By adding Focus List stocks, there's a great chance you'll be getting into companies whose future earnings estimates will be raised, which can lead to price momentum.
Focus List Spotlight: Goldman Sachs (GS)
Founded in 1869, The Goldman Sachs Group, Inc. is a leading global financial holding company providing investment banking, securities, investment management and consumer banking services to a diversified client base. The company is headquartered in New York, with offices in London, Frankfurt, Tokyo, Hong Kong and other major financial centers globally.
On July 11, 2018, GS was added to the Focus List at $226.85 per share. Shares have increased 80.1% to $408.56 since then, and the company is a #3 (Hold) on the Zacks Rank.
For fiscal 2021, eight analysts revised their earnings estimate upwards in the last 60 days, and the Zacks Consensus Estimate has increased $8.02 to $52.72. GS boasts an average earnings surprise of 72%.
Additionally, GS's earnings are expected to grow 113.1% for the current fiscal year.
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The Goldman Sachs Group, Inc. (GS): Free Stock Analysis Report
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