Kramer Thinks This Is The Right Time To Buy Goldman

In an article on CNBC, strategist Hilary Kramer said that fortune always favors the bold when it comes to trading in Goldman Sachs (GS). Although Kramer is bearish about the overall market, she feels that there is opportunity to make profits if you look at the right places.

Hilary Kramer believes that the trick to making money in this market is to find stocks that are currently undervalued, such as GS.

According to her, the reasons for buying the stock include the high probability of the civil charges faced by Goldman being politically motivated. In fact, Douglas Sipkin of Ticonderoga Securities shares her belief. Sipkin had pointed out that although Goldman seems to be bearing the government’s brunt at the moment, soon the entire Wall Street will start feeling the pain. This will reduce the impact on Goldman on a relative basis.

Other reasons for Kramer to like Goldman are:

* The company’s fundamentals are extremely strong
* Goldman is very well positioned in its market
* The company’s earnings power is intact
* The company could buyback $3.5 billion in stock through the end of 2010

Moreover, while the company’s stock is trading at 1.3 times its book value, it should be trading at 1.6 times. As a result, there is a possibility of Goldman’s share price going as high as $210 by Q2 2011. Kramer said, "I expect at least a 30% return in a 12 month time period."

Sipkin has also raised his estimates, as he believes there is 28% upside from here.

More Analyst Color here.