With the year almost over, we’re taking a look at all 30 stocks in the Dow, starting with the worst performer— Walgreens Boots Alliance —and working our way up to the highest-flying stock in the benchmark—Apple. The ranking may shift before the close of 2019 trading, but the stories behind the stocks shouldn’t.
Goldman Sachs stock may be the turnaround story of 2019.
Brought down in part by the volatility that roiled markets in the fourth quarter of 2018, Goldman (ticker: GS) ended the year as the worst performer in the Dow Jones Industrial Average. Shares were further hampered by an investigation into money misappropriated from a Malaysian sovereign fund by a government advisor and two now former Goldman bankers.
But Goldman shocked Wall Street in January by reporting fourth quarter 2018 profits that blew past analyst estimates. Ever since, the stock has steadily climbed with little interruption. Shares are up 37% to $229.93 this year—still below its all-time closing high of $273.38, reached in March 2018, but enough of a surge to be one of the Dow’s top performers this year.
And Goldman’s stock has largely accomplished its climb amid a period of change at the bank as well as broader uncertainties spurred by the trade war and worries over slowing economic growth. Not to mention questions over penalties and other repercussions the bank may face for its involvement in the 1Malaysia Development Berhad (1MDB) scandal. Between 2012 and 2013, the bank orchestrated $6.5 billion in bond sales for the state investment fund, only to have much of the money misappropriated by Jho Low, a Malaysian government advisor, and two now former Goldman bankers, according to prosecutors.
In early December, the bank was nearing a $2 billion settlement agreement with the Justice Department over its involvement in the scandal under which one of the bank’s subsidiaries would plead guilty for violations of U.S. bribery laws, according to reports. As part of the agreement, the bank would also have to install an independent monitor to review and recommend changes to its compliance practices.
“We are having ongoing discussions on 1MDB but are not able to comment on the status of settlement talks,” a Goldman spokesperson told Barron’s.
The scandal was a drag on the stock late in 2018, just as David Solomon, successor to Lloyd Blankfein, took over as chief executive.
Solomon, a part-time DJ who takes the subway, has been navigating the bank through the 1MDB scandal and working to diversify the bank’s offerings as trading revenues—a former consistent bright spot for the bank—have been choppy in recent quarters.
Steering the bank in new directions has meant that some key players have left amid the changes. Marty Chavez, co-head of the bank’s trading division, left in September 2019 as did Elisha Wiesel, who was Goldman’s chief information officer. Their exits were some of at least a dozen that The Wall Street Journal reported on in September.
To be sure, the bank has also made some key hires. It brought on Amazon Web Services alum Marco Argenti as its co-chief information officer and hired Atte Lahtiranta as chief technology officer in September.
Amid the turnover, Goldman, a bank nearly synonymous with Wall Street, has gradually been making plays into more Main Street areas. It’s been offering personal loans through its online platform Marcus since 2016. And this year it teamed up with Apple to offer a credit card.
“We are very pleased with our progress in building a modern, digital consumer bank,” a Goldman spokesperson said.
Write to Carleton English at email@example.com
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