Could this financial action reach $ 1,000 within 5 years?


Bank stocks aren’t known for their big returns, but Fool.com contributor Matt Frankel thinks Goldman Sachs (NYSE: GS) could be an exception. In this fool live Video clip, recorded on October 18, Frankel explains to Focus on industry host Jason Moser why he thinks Goldman could be in $ 1,000 stock in just a few years.

Matt Frankel: I’m going to make a bold prediction and say Goldman Sachs will be $ 1,000 stock within five years.

Jason Moser: Wow.

Frankel: Well I’m going to go back and say, I think Goldman Sachs should be in $ 1,000 stock today. That would put him at around 22 times earnings, which really isn’t a stretch when you look at the rest of the market.

Moser: It is as if it would be.

Frankel: If it turns out that they can continue to grow their mainstream business the way they have been and it looks like their investment banking division is holding onto its lead, I think it might be their time. It is a stock that historically has not been appreciated by the market. They had a negative stigma attached to their name for the longest time. They are really trying to renovate or reinvent themselves with their consumer banking division, which they do a fantastic job of. I think Goldman Sachs is going to perform very well, especially as interest rates go up, right now they are building their banking division for consumers in a low interest rate environment.

Moser: Yes.

Frankel: As the rates go up, I think they could be a big winner in this area as well. There is a lot to like about it.

Moser: Last week on Motley Fool Money, Chris Hill asked me the same question, I was browsing these banks for the show. It’s interesting that you went with Goldman because I was tying the knot in between. It was Goldman and Bank of America (NYSE: BAC). Now I ended up calling Bank of America as my winner, really I felt like revenue growth, 12%, 15% deposits increased. I mean, this record investment banking network and there’s just a lot to like about the quarter. I thought the men, when I chose Bank of America, that Matt Frankel would be proud of me for doing this. There you go, you choose Goldman, so well.

Frankel: It’s hard to make an argument against Bank of America.

Moser: I’m just giving you a hard time. I am okay. For me, Goldman and Bank of America stood out as real winners there. I think you’re absolutely right, Goldman has a lot to offer so I wouldn’t be shocked to see them continue this success.

This article represents the opinion of the author, who may disagree with the “official” recommendation position of a premium Motley Fool consulting service. We are heterogeneous! Challenging an investment thesis – even one of our own – helps us all to think critically about investing and make decisions that help us become smarter, happier, and richer.


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