Goldman Sachs

1
Goldman Sachs

• Leng M. Hua
• October 26, 2005

UNL Finance Club
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Agenda

• Company
• Products and services
• Opportunities
• Risks
• Valuation

3
Company

• Founded in 1869
• Current CEO Henry M Paulson, Jr
• Global framework
• Strong focus on teamwork
• Ownership mentality among management

4
Business
5
Investment Banking

• Advisory services to companies
• Mergers acquisitions
• Corporate defense
• Equity and debt underwriting
• IPOs

6
Trading and Principal Investments

• Interest rate and credit products
• Mortgage backed securities
• Currencies
• Commodities
• Stocks, options, and futures
• Proprietary trading

7
Asset Management Securities

• Financial advice to institutions and individuals
• Prime brokerage
• Lending services to mutual funds, pension funds
  hedge funds

8
Opportunities

• High variable cost structure
• Continued investor demand for high yielding debt
  securities
• Growth in commission revenues, margin lending,
  and merchant banking

09/30/2005
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Risks

• Rising interest rates
• Flattening yield curve
• Widening credit spreads lower bond prices
• Exchange rate risks
• Proprietary trading
• Competition

Lehman Brothers Merrill Lynch Morgan Stanley
10
Valuation

• Stock gained 14 YTD 10/15/2005
• Forecast EPS 10.90 for FY 2006
• 10.4x P/E multiple in FY 2006
• Comparable to peers
• Steep discount to overall market
• Discount to shares historical average of 16x

11
Recommendation

• BUY!