Hedge funds are piling into bank stocks at the fastest rate in three years following the U.S. election, according to new data from Goldman Sachs (GS).
Financial stocks such as banks are the hot play for hedge funds after Donald Trump reclaimed the U.S. presidency, says Goldman Sachs, which is itself a Wall Street investment bank. Banks and other financial stocks are expected to benefit from less regulation and tax reforms under a new Trump administration.
As a group, U.S. bank stocks have risen 11% since Trump’s election win became official in the past week. Stocks of companies that offer consumer financing and financial services have also been rising in recent days after the U.S. election.
Selling Renewable Energy Stocks
On the opposite side, hedge funds have been selling stocks of utilities and companies involved in the clean energy transition since the U.S. election, says Goldman. Independent power and renewable electricity producers were the most sold stocks, with hedge funds now betting against green energy.
A new Trump administration is expected to increase drilling for crude oil and natural gas, ramp-up fracking, and rollback environmental legislation aimed at reducing climate change. The stock of Goldman Sachs has risen nearly 60% so far this year.
Is GS Stock a Buy?
The stock of Goldman Sachs has a consensus Strong Buy rating among 16 Wall Street analysts. That rating is based on 12 Buy, four Hold, and no Sell ratings issued in the last three months. The average GS price target of $564.27 implies 6.27% downside risk from current levels.
Read more analyst ratings on GS stock
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