Is Goldman Sachs Group, Inc. (GS) A Good Stock To Buy?

One of the main reasons for the decline of Goldman Sachs’ shares is the slowdown in the IPO sector expected this year. Goldman generates a significant portion of its revenue from underwriting equity. Last year, the number of IPO’s fell by 38% and amid volatility in global markets, investors fear a further decline in public offerings. On the other hand, Goldman also advises companies on mergers and acquisitions and experts forecast the M&A activity to remain strong this year.

Overall, the latest earnings season in the banking sector were better than expected, although some banks, including Goldman posted lower profits in year-on-year terms due to high legal costs and settlements related to the financial crisis period. Nevertheless, Goldman posted EPS of $4.68, higher than the $3.53 anticipated by analysts. While its revenue of $7.27 billion, topped the estimates of $7.07 billion, but was lower than the $7.69 billion figure reported a year earlier. Following the decline, Goldman’s stock seems attractive, trading at 0.8 times book value, below the banking industry average of around 1.1. In addition, the stock sports a dividend yield of 1.72% and the company has a substantial buyback program, which shows management’s commitment to return capital to shareholders.

Keeping this in mind, let’s check out the new action surrounding Goldman Sachs Group, Inc. (NYSE:GS).

What have hedge funds been doing with Goldman Sachs Group, Inc. (NYSE:GS)?

At the end of the fourth quarter, a total of 59 of the hedge funds tracked by Insider Monkey were long this stock, a decline of 6% from the previous quarter. With the smart money’s positions undergoing their usual ebb and flow, there exists a select group of noteworthy hedge fund managers who were increasing their stakes considerably (or already accumulated large positions).