Pessimism Swirls as Goldman Sachs Group Inc (GS) 'Goes Soft' on Interns

Goldman Sachs Group Inc (NYSE:GS) is no longer allowing interns to work overnight

Jun 18, 2015 at 10:32 AM
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I remember it like it was yesterday. I lived in New York, and one of my best friends worked for Goldman Sachs Group Inc (NYSE:GS) -- and he was almost always working. At least twice, I visited his office around midnight, and couldn't believe how many employees and interns were still hacking away at their computers.

Well, apparently, Goldman's gone soft. The news today: The investment bank is banning interns between the hours of 12 a.m. and 7 a.m.

In one sense, the development makes little sense. I mean, who is more capable of pulling an all-nighter than a motivated 20-something? But the 2013 death of a Bank of America Corp (NYSE:BAC) intern -- partially brought on by exhaustion -- reminds us that there are only so many all-nighters a body can take.

Meanwhile, GS has been muscling higher on the charts, up over 10% this year at $213.90, atop support from its 10-day moving average. What's more, the stock is approaching its post-recession peak of $214.60, touched last week.

Nevertheless, skepticism is plentiful on the Street. Eleven of 14 analysts consider GS a "hold" or worse, and its consensus 12-month price target of $212 is below current trading levels. This could pave the way for future upgrades and/or price-target hikes.

Options traders are similarly bearish toward GS. The stock's 50-day International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) put/call volume ratio of 0.95 is just one percentage point from an annual high. In other words, speculators have rarely bought to open puts over calls at such a rapid pace.

Echoing this, Goldman Sachs Group Inc's (NYSE:GS) Schaeffer's put/call open interest ratio (SOIR) of 1.31 ranks in the 81st percentile of its 52-week range -- meaning short-term put open interest outweighs call open interest by a bigger-than-usual margin. A capitulation among these skeptics could add fuel to GS' fire.
 

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