At 9:52:50 today, I bought another 1/4 of a position in GS at $116.47. This is my first buy in GS since I sold 1/2 of my position at $171.49 this past January 19, 2011. I am now holding 1/2 of my target position.
I sold because of a larger quarterly drop in earnings and a slow down in investment banking and institutional client transactions. I’m now buying because of an increase in buzz about mergers and acquisitions. Today for example there are 11 major deals on the table:
(Thanks to Meenakshi Iyer for compiling this list)
** Google Inc said it will buy phone hardware maker Motorola Mobility Holdings Inc for $12.5 billion in cash to bolster the adoption of its Android mobile software.
** Bank of America Corp plans to sell its credit card business in Canada to TD Bank Group and will exit its card business in the UK and Ireland. The agreement with TD Bank covers an $8.6 billion card portfolio, according to a Bank of America statement on Monday.
** Time Warner Cable said it will buy The Carlyle Group’s cable operator Insight Communications for $3 billion in cash, to broaden its presence in midwest United States.
** The world’s No.1 oil drilling contractor, Transocean , is to pay $1.43 billion for Aker Drilling , almost double its market price, to boost its presence in Norway and at the high-tech end of the industry.
** British electrical engineering firm Spectris Plc agreed to buy privately held Omega Engineering for $475 million to strengthen its industrial controls business.
** Domtar Corp said it will buy Attends Healthcare Inc for $315 million including debt.
** Virgin Media said it had sold its 50 percent stake in UKTV, home to 10 channels including Dave and GOLD, to Scripps Networks for 239 million pounds ($388.9 million) as part of its strategy to move away from content production.
** Advertising company Interpublic Group said it would sell about half of its stake in Facebook for $133 million.
** Insurance Australia Group will buy a 20 percent stake in a Chinese insurer for $107 million in a foray into the world’s second-largest economy, marking a key step in meeting its targets of earning 10 percent of gross written premium from Asia by 2016.
** Hunting Plc has bought US-based Dearborn Precision Tubular Products for US$83.5m.
* MTY Food Group Inc said that its subsidiary MTY Tiki Ming Enterprises Inc entered into a binding agreement to acquire the assets of Koryo Korean BBQ Franchise Corporation for a $1.8 million to be paid in cash.
GS is clearly best of breed with a solid market position and a strong balance sheet. I expect GS to perform at the top end of its peers and return to a significantly higher stock price over the next 12 months. After seeing a stock price decline from $170+, I’m confident that GS is at or near the bottom, so I’m buying.