01-30-2022, 01:05 AM
Is GS undervalued based on price to book against return on assets?
<!-- SC_OFF --><div class="md"><p>Does anyone here have good knowledge of GS please?</p> <p>My question: Is there an obvious reason GS's return on assets is higher than the sector average yet their price to book value is lower?</p> <p>When screening the financial sector I like to look at price to book against return on assets. The theory being a financial stock that has a higher return on assets should have a higher price to book value compared to others in the sector that have a lower return on assets. This is not the way I value a stock, it is just my starting point to highlight financial stocks that might be interesting.</p> <p>GS is standing out as interesting with a price to book value of 1.04 against a return on assets of 1.65% versus similar businesses averaging a price to book value of 1.3 against a return on assets of 1.27% (all TTM).</p> <p>I know analysts are forecasting about a 30% decline in earnings for 2022 compared to 2021 and their return on assets prior to 2021 have often been under 1% - do those two points answer my question or is there something else of note or is GS potentially undervalued? Thanks!</p> </div><!-- SC_ON --> submitted by <a href="https://www.reddit.com/user/K2Mok"> /u/K2Mok </a> <br/> <span><a href="https://www.reddit.com/r/investing/comments/sf692l/is_gs_undervalued_based_on_price_to_book_against/">[link]</a></span> <span><a href="https://www.reddit.com/r/investing/comments/sf692l/is_gs_undervalued_based_on_price_to_book_against/">[comments]</a></span>Kind Regards R
<!-- SC_OFF --><div class="md"><p>Does anyone here have good knowledge of GS please?</p> <p>My question: Is there an obvious reason GS's return on assets is higher than the sector average yet their price to book value is lower?</p> <p>When screening the financial sector I like to look at price to book against return on assets. The theory being a financial stock that has a higher return on assets should have a higher price to book value compared to others in the sector that have a lower return on assets. This is not the way I value a stock, it is just my starting point to highlight financial stocks that might be interesting.</p> <p>GS is standing out as interesting with a price to book value of 1.04 against a return on assets of 1.65% versus similar businesses averaging a price to book value of 1.3 against a return on assets of 1.27% (all TTM).</p> <p>I know analysts are forecasting about a 30% decline in earnings for 2022 compared to 2021 and their return on assets prior to 2021 have often been under 1% - do those two points answer my question or is there something else of note or is GS potentially undervalued? Thanks!</p> </div><!-- SC_ON --> submitted by <a href="https://www.reddit.com/user/K2Mok"> /u/K2Mok </a> <br/> <span><a href="https://www.reddit.com/r/investing/comments/sf692l/is_gs_undervalued_based_on_price_to_book_against/">[link]</a></span> <span><a href="https://www.reddit.com/r/investing/comments/sf692l/is_gs_undervalued_based_on_price_to_book_against/">[comments]</a></span>Kind Regards R