GS was initated in FilthyRich 2006 stocklist on 11/05/05 at $126 a share. In one year, the stock has generated stellar gain for the group with near 60% gain. The stock is knocking on the $200 door. Original target price for the stock was $160. Due to tremendous revenue upside generated from the commodity trading in the first half of this year, we bumped up the target to $200. Now I am revising my target to $230. Due to record M&A activities in the US and hot IPO deals abroad especially in Asia, GS is on the verge of delivering another record blow-out Q. I don't have time and too tired from work to list all the details to back this statement today. Over this Thanksgiving holiday, I will write up a more detailed analysis on GS upcoming Q results in mid-December.
But simply put, there could be as much as 30 to 40 cents upside to the current EPS estimate and GS may deliver near $20 EPS (not a typo) for 2006. This puts the stock at PE of mere 10 even at $200 level. People assume that GS cannot sustain this level of performance and estimate that the earning could fall in 2007 but this may not be the case. While earning cannot sustain this level of growth, I believe it will not fall next year much from the current level.
Towards the earning in mid Dec, I believe that the stock will decidedly break above $200 and rally significantly higher in anticipation of the great results. As such, I believe that now is the time to load up on the stock.If the run-up is great (to near my target of $230), we can take some off the table. If the rally is not quite as strong as I anticiapte, then we can hold the stock through the earning result. I believe the earning will be great and will be above most aggressive analyst estimate out there so if the stock do not run up, it will react very positively to the upside.
GS has shown golden performance for FilthyRich group to date. I believe it still has the golden opportunities ahead and we can stick with the stock despite the substantial gain we have to date.
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