Kevin Johnson, a director at Goldman Sachs (GS), recently bought 2,400 shares. The buy is a new stake for the director, and came to a total cost of $1,485,648.
That’s the first insider buy since March 2022, when another company director bought 82 shares for just under $30,000. Otherwise, there have been over two dozen insider sales over the past year, including the company CEO and CFO. Most sales have been direct sales, not a result of exercising stock options.
Overall, Goldman insiders own 0.5% of shares.
The investment bank is up 67% over the past year, amid a market rally and an increase in trading activity. Earnings jumped 45% on a 4% increase in revenues.
Plus, Goldman operates with a 24% profit margin, a strong return that could expand as demand for investment banking services improve. Fortunately, Wall Street CEOs also expect further M&A activity, which should also benefit Goldman.
Even after its big run, shares trade at 14 times forward earnings, a discount to the overall market and reasonable valuation.
Action to take: Shares are showing strong momentum higher and are valued low enough to see further gains in the quarters ahead. Today’s buyers can also get a 2.1% dividend on shares.
For traders, the April $650 calls, last trading for about $23.00, could see mid-double-digit returns from a further rally in the months ahead.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.