Womenomics: Firms with female execs perform better, study finds

An analysis by Goldman Sachs found firms that have more women in senior positions as managers or on their boards outperform in their sectors [FILE: …

Companies with a higher presence of female executives have historically rewarded their equity investors with better performance, said Goldman Sachs Group Inc. strategists as they unveiled a basket of European firms that employ an elevated number of women.

“Over more or less any period since the global financial crisis, having more women in senior positions as managers or on the board is associated with company outperformance relative to the sector,” the strategists led by Sharon Bell wrote in a note on Tuesday. They added that this doesn’t apply to all industries and that academic research isn’t yet conclusive on this trend.

Goldman analysts rolled out a new basket of European companies with the most women at all levels, called Womenomics (GSSTWOMN Index), which includes firms such as LVMH Moet Hennessy Louis Vuitton SE, Swedbank AB, Nestle SA and AstraZeneca Plc. French and Nordic companies dominate the list, said the strategists, as France has a quota system for female board members while the Nordic region has historically had higher female labor participation.

Europe is beating the U.S. in its push to make women a more equal part of the workforce, and although the pay gap between men and women remains large in the region, it’s smaller in all major countries in Europe than in the U.S., Canada and in Japan, according to Goldman. Workforce participation rates among women in Europe have been rising, while in the U.S. they’ve been flat since the late 1990s, said the strategists.

(Bloomberg)

The research weighs in on the market debate regarding the importance of investing based on environmental, social and governance principles. Europe has been seeing a boom in appetite for such investing this year, with about 50% of all new exchange-traded funds in Europe, the Middle East and Africa this year ESG-related and accumulating about $4.2 billion in assets, according to Citigroup Inc. data. That compares with $3.8 billion for new non-ESG funds.

ESG Flows

Inflows into ESG-focused strategies may have contributed to the better equity performance among companies with higher female presence, Goldman said.

“The price outperformance may be a function of flows into ESG funds targeting diversity metrics, rather than more women producing better outcomes or lower risks,” the strategists said. “But even if this were the case, we continue to believe investors will value higher social and governance scores for companies, so companies that do perform well on these metrics should continue to attract both flows and a premium.”

As a to-be-sure, Goldman strategists also added that they weren’t able to find a correlation between higher female presence and returns on equity. While the outperformance of companies with more women is “pretty robust” for different time periods, in industries like technology it doesn’t work, according to Goldman, as the sector has been slow to improve its diversity.

They also said that academic research hasn’t been conclusive on whether employing more women means better performance.

Goldman’s Europe Womenomics index is down about 7.8% this year, compared with a drop of 11% for the benchmark Stoxx Europe 600 gauge. Over the past five years, the difference is much more significant, with Womenomics up 22% compared with a gain of around 4.2% for the Stoxx 600.

Covid-19 Effect

The companies in the basket have on average 46% female employees, compared with 36% for the benchmark Stoxx Europe 600 Index. In addition the selected companies have 40% female managers and 42% women on the board.

Goldman doesn’t believe females in the workforce will be more adversely affected than men by the fallout from Covid-19. While women are more heavily represented in such industries as travel, media and retail, which have seen strong profit declines during this year’s crisis, more women are employed by the public sector, where salaries have held up better.

Longer-term social changes as a result of the pandemic could also benefit women, according to Goldman.

“There is likely to be less commuting, more online work and working from home, and this should enhance flexibility for both men and women,” the strategists said. “It is the flexibility of both women and men that we think has been a determinant in increasing women’s participation in the workforce in recent years.”

Oppenheimer Issues a Buy Rating on Goldman Sachs Group (GS)

Goldman Sachs Group has an analyst consensus of Moderate Buy, with a price target consensus of $250.64, which is a 18.9% upside from current …

In a report released today, Chris Kotowski from Oppenheimer assigned a Buy rating to Goldman Sachs Group (GS), with a price target of $326.00. The company’s shares closed last Tuesday at $210.81.

According to TipRanks.com, Kotowski is a 4-star analyst with an average return of 4.9% and a 59.5% success rate. Kotowski covers the Financial sector, focusing on stocks such as Apollo Global Management, JPMorgan Chase & Co., and New Mountain Finance.

Goldman Sachs Group has an analyst consensus of Moderate Buy, with a price target consensus of $250.64, which is a 18.9% upside from current levels. In a report issued on September 30, Merrill Lynch also reiterated a Buy rating on the stock with a $240.00 price target.

See today’s analyst top recommended stocks >>

The company has a one-year high of $250.46 and a one-year low of $130.85. Currently, Goldman Sachs Group has an average volume of 3.31M.

TipRanks has tracked 36,000 company insiders and found that a few of them are better than others when it comes to timing their transactions. See which 3 stocks are most likely to make moves following their insider activities.

Goldman Sachs Group, Inc. engages in global investment banking, securities, and investment management, which provides financial services. It operates through the following business segments: Investment Banking, Global Markets, Asset Management, and Consumer & Wealth Management. The Investment Banking segment serves public and private sector clients around the world and provides financial advisory services, help companies raise capital to strengthen and grow their businesses and provide financing to corporate clients. The Global Markets segment serves its clients who buy and sell financial products, funding and manage risk. The Asset Management segment provides investment services to help clients preserve and grow their financial assets. The Consumer & Wealth Management segment helps clients to achieve their individual financial goals by providing a wealth advisory and banking services. The company was founded by Marcus Goldman in 1869 and is headquartered in New York, NY.

Read More on GS:

Goldman Sachs (GS) Stock Tumbles Following Disappointing Quarterly Earnings

Shares of Goldman Sachs Group Inc. (NYSE:GS) tumbled on Monday after the investment bank … Traders have placed the likelihood of another quarter-point rate cut at 72.2%, according to CME Group’s Fed Fund futures prices.

Shares of Goldman Sachs Group Inc. (NYSE:GS) tumbled on Monday after the investment bank reported weaker than expected profits for its most recent quarter. Lower advertising fees and weak underwriting activity were the main culprits for the disappointing earnings figures.

Q3 Earnings Summary

  • Revenue: $8.32 billion
  • Earnings: $4.79 a share

Goldman’s third-quarter profits amounted to $1.88 billion, or $4.79 a share, on revenue of $8.31 billion, the company reported Tuesday. Analysts were expecting per-share earnings to come in at $4.81. Revenues were slightly higher than expected but were still down 6% from year-ago levels.

The bank’s investing sand lending division largely missed the mark, producing revenue of $1.68 billion that was 17% lower than a year earlier and below forecasts of $1.74 billion. Net revenues from equities tumbled 40% year-over-year to $662 million.

The company also set aside $291 million for credit losses, which is 67% higher than the same period a year ago.

David Solomon, Goldman’s chief executive officer, said the company remains on track to “execute on our strategic priorities, including investing in important growth opportunities in our existing and new businesses.”

Solomon said the bank’s performance in Q3 was solid “in the context of a mixed operating environment.”

Solomon took over as chief back in October 2018 and immediately began working on an internal review of the firm’s operations. As CNBC notes, the controversial initiative has led to departures among several long-time partners.

Soft Monetary Policy

Wall Street’s mega banks are facing several pressure points emanating from the U.S.-China trade war, declining economic growth and multiple rate cuts by the Federal Reserve. The Fed has lowered interest rates by a combined 50 basis points in its last two meetings and is expected to cut again before the year is over.

When the Fed lowers interest rates, banks like Goldman Sachs usually pass on the savings to their customers.

The U.S. central bank is scheduled to hold its next policy meeting Oct. 29-30. Traders have placed the likelihood of another quarter-point rate cut at 72.2%, according to CME Group’s Fed Fund futures prices.

GS Stock Update

Source: Yahoo Finance

Shares of Goldman Sachs rose 0.6% on Monday but were off more than 2% in Tuesday’s pre-market session. The stock is down nearly 13% from its 52-week high of $234.06. Goldman has a total market capitalization of $74 billion.

The stock has outperformed the S&P 500’s financial index this year, gaining nearly 23% since January. Financials as a whole are up 16% for the year.

Sorted by weight, Goldman Sachs is the sixth-largest component of the Dow Jones Industrial Average at 5.21%.

Disclaimer: Author holds no investment position in Goldman Sachs at the time of writing.

Goldman evaluating role in China’s Megvii IPO after US blacklist

It added that a May 2019 report from Human Rights Watch (HRW) on a surveillance app in Xinjiang had implicated Megvii’s Face++, but in a corrected …

NEW YORK/HONG KONG (Reuters) – Goldman Sachs Group Inc (GS.N) said on Tuesday it was reviewing its involvement in Megvii Technology Ltd’s planned initial public offering after the U.S. government placed the Chinese artificial intelligence firm on a human rights blacklist.

FILE PHOTO: The Goldman Sachs company logo is seen in the company’s space on the floor of the New York Stock Exchange, (NYSE) in New York, U.S., April 17, 2018. REUTERS/Brendan McDermid

The Trump administration said on Monday that Megvii and seven other Chinese companies were targeted because they were implicated in Beijing’s repression of Muslim minority populations in the Xinjiang Uighur Autonomous Region in the far west of the country.

In an emailed statement in response to a request for comment on the Alibaba-backed Megvii IPO, Goldman said it was “evaluating in light of the recent developments”.

Sources had previously told Reuters the listing was scheduled for Hong Kong in the fourth quarter and might raise as much as $1 billion.

Other U.S. companies involved with the blacklisted Chinese firms, whether as investors or as underwriters, are also likely to re-evaluate their relationships, risk consultants and Silicon Valley lawyers said.

Goldman is a joint sponsor of the Megvii IPO, alongside Citigroup Inc (C.N) and JPMorgan Chase & Co (JPM.N), which both declined to comment.

Megvii declined to comment on Goldman’s statement but said that it was in close contact with the Hong Kong Stock Exchange about its IPO plans and would continue to monitor developments.

Goldman had thoroughly evaluated the Megvii deal before initially signing onto it using its usual due diligence process, a person familiar with the matter said.

Known for its facial recognition platform Face++, Megvii will become the first Chinese AI firm to go public if the deal goes ahead.

The company provides facial recognition and other AI technology to governments and companies including Alibaba (BABA.N), Ant Financial, Lenovo Group Ltd (0992.HK) and Huawei.

MUSLIM MISTREATMENT

The U.S. Department of Commerce on Monday barred eight companies, as well as 20 Chinese government entities, from buying U.S. technology without U.S. government approval.

That will include high-powered computer chips made by U.S. companies such as Nvidia (NVDA.O), Intel (INTC.O) and Qualcomm (QCOM.O), which are considered critical for building and operating many AI systems.

The government said the entities were “implicated in human rights violations and abuses in the implementation of China’s campaign of repression, mass arbitrary detention, and high-technology surveillance against Uighurs, Kazakhs, and other members of Muslim minority groups”.

Megvii said it “strongly objects” to being added to the blacklist and there were “no grounds” for the designation. In a statement, it said around 1% of revenues were derived from Xinjiang in 2018 and none in the six months ended June 30.

It added that a May 2019 report from Human Rights Watch (HRW) on a surveillance app in Xinjiang had implicated Megvii’s Face++, but in a corrected and reissued report, HRW did not highlight Megvii’s name.

On Tuesday, the U.S. government imposed visa restrictions on Chinese government and Communist Party officials it believes responsible for the detention or abuse of Muslims in Xinjiang.

U.N. experts and activists say at least 1 million Uighurs, and members of other largely Muslim minority groups, have been detained in camps in the remote region.

Beijing denies any mistreatment at the camps, which it says provide vocational training to help stamp out religious extremism and teach new work skills.

U.S. Senator Marco Rubio, who has been seeking to spotlight both the easy access that Chinese companies have been given to U.S. markets and human rights abuses in Xinjiang, said the government’s move had been long overdue.

“We should continue to do more to hold Chinese government and Communist Party officials accountable for potential crimes against humanity being committed in Xinjiang,” he said in a statement.

“PUTTING THEMSELVES AT RISK”

In recent years, Chinese and some foreign investors have poured money into startups that specialize in facial and voice recognition software, as well as other surveillance equipment and software. They have been buoyed by China’s plans to build a ubiquitous CCTV surveillance network.

Another company on the U.S. government’s blacklist, SenseTime, is among the world’s most highly valued artificial intelligence firms and counts marquee U.S. technology investors Tiger Global and Silver Lake Partners among its backers. Fidelity, the U.S. mutual fund firm, is also a SenseTime investor, along with Qualcomm.

The Massachusetts Institute of Technology said it will review its relationship with SenseTime, the first company to join the U.S. school’s research effort into human and machine intelligence.

MIT will review all of existing relationships with organizations on the blacklist and “modify any interactions as necessary,”, a spokeswoman said in an email.

Risk consultants say that investors and underwriters have jumped into the sector without fully assessing the dangers both to their reputations and to the valuations of the companies concerned.

“There has been a dearth of adequate due diligence performed on these companies from both a national security and a human rights perspective,” said Roger Robinson, president and CEO of Washington DC-based risk consultancy RWR Advisory Group, and a former senior director of international economic affairs at the National Security Council.

He said that investors and others involved with these Chinese companies “may well be putting themselves at risk.”

Silver Lake, Tiger Global and Qualcomm all declined to comment. Fidelity didn’t immediately return a call seeking a comment.

“There will be a judgment call as to whether any U.S. investor would want to be associated with such businesses,” said Rocky Lee, managing partner of the Silicon Valley office of law firm King & Wood Mallesons.

“I believe you will see some ‘quiet’ exiting by U.S. funds and possibly LPs, at least those U.S. investors who feel strongly that owning companies engaging in these activities are either immoral or politically incorrect.”

Reporting by Joshua Franklin and Julie Zhu and Svea Herbst-Bayliss; Writing by Martin Howell; Editing by Sandra Male/Jane Wardell/ Edwina Gibbs/Jane Merriman

Lau Associates Llc Buys iShares Core S&P 500 ETF, Corteva Inc, Canadian Solar Inc, Sells …

Lau Associates Llc initiated holding in Canopy Growth Corp. The purchase prices were between $22.93 and $41.06, with an estimated average price …

Greenville, DE, based Investment company Lau Associates Llc (Current Portfolio) buys iShares Core S&P 500 ETF, Corteva Inc, Canadian Solar Inc, Canopy Growth Corp, First Solar Inc, sells JPMorgan Ultra-Short Income ETF, Cummins Inc, Alaska Air Group Inc, Goldman Sachs Group Inc, Comcast Corp during the 3-months ended 2019Q3, according to the most recent filings of the investment company, Lau Associates Llc. As of 2019Q3, Lau Associates Llc owns 89 stocks with a total value of $179 million. These are the details of the buys and sells.

For the details of LAU ASSOCIATES LLC’s stock buys and sells,go to https://www.gurufocus.com/guru/lau+associates+llc/current-portfolio/portfolio

These are the top 5 holdings of LAU ASSOCIATES LLC

  1. JPMorgan Ultra-Short Income ETF (JPST) – 622,472 shares, 17.54% of the total portfolio. Shares reduced by 29.65%
  2. Apple Inc (AAPL) – 71,093 shares, 8.90% of the total portfolio. Shares reduced by 0.21%
  3. Intel Corp (INTC) – 157,735 shares, 4.54% of the total portfolio. Shares reduced by 3.33%
  4. Johnson & Johnson (JNJ) – 57,110 shares, 4.13% of the total portfolio. Shares reduced by 7.81%
  5. PepsiCo Inc (PEP) – 51,860 shares, 3.97% of the total portfolio. Shares reduced by 5.59%

New Purchase: iShares Core S&P 500 ETF (IVV)

Lau Associates Llc initiated holding in iShares Core S&P 500 ETF. The purchase prices were between $284.16 and $302.28, with an estimated average price of $295.89. The stock is now traded at around $288.68. The impact to a portfolio due to this purchase was 1.38%. The holding were 8,250 shares as of .

New Purchase: Corteva Inc (CTVA)

Lau Associates Llc initiated holding in Corteva Inc. The purchase prices were between $26.43 and $31.63, with an estimated average price of $28.92. The stock is now traded at around $26.66. The impact to a portfolio due to this purchase was 0.98%. The holding were 62,749 shares as of .

New Purchase: Canadian Solar Inc (CSIQ)

Lau Associates Llc initiated holding in Canadian Solar Inc. The purchase prices were between $18.88 and $24.5, with an estimated average price of $21.78. The stock is now traded at around $17.57. The impact to a portfolio due to this purchase was 0.24%. The holding were 22,900 shares as of .

New Purchase: Canopy Growth Corp (CGC)

Lau Associates Llc initiated holding in Canopy Growth Corp. The purchase prices were between $22.93 and $41.06, with an estimated average price of $30.63. The stock is now traded at around $22.04. The impact to a portfolio due to this purchase was 0.18%. The holding were 13,860 shares as of .

New Purchase: First Solar Inc (FSLR)

Lau Associates Llc initiated holding in First Solar Inc. The purchase prices were between $58.01 and $67.31, with an estimated average price of $64.07. The stock is now traded at around $55.55. The impact to a portfolio due to this purchase was 0.16%. The holding were 4,850 shares as of .

New Purchase: Delta Air Lines Inc (DAL)

Lau Associates Llc initiated holding in Delta Air Lines Inc. The purchase prices were between $56.14 and $63.16, with an estimated average price of $59.21. The stock is now traded at around $53.05. The impact to a portfolio due to this purchase was 0.12%. The holding were 3,760 shares as of .

Added: NextEra Energy Inc (NEE)

Lau Associates Llc added to a holding in NextEra Energy Inc by 50.86%. The purchase prices were between $204.02 and $232.99, with an estimated average price of $216.39. The stock is now traded at around $229.26. The impact to a portfolio due to this purchase was 0.08%. The holding were 1,750 shares as of .

Added: Union Pacific Corp (UNP)

Lau Associates Llc added to a holding in Union Pacific Corp by 25.04%. The purchase prices were between $157.47 and $179.95, with an estimated average price of $168.11. The stock is now traded at around $150.65. The impact to a portfolio due to this purchase was 0.03%. The holding were 1,498 shares as of .

Added: Schlumberger Ltd (SLB)

Lau Associates Llc added to a holding in Schlumberger Ltd by 21.42%. The purchase prices were between $31.25 and $40.97, with an estimated average price of $36.53. The stock is now traded at around $32.01. The impact to a portfolio due to this purchase was 0.02%. The holding were 7,369 shares as of .

Sold Out: Cummins Inc (CMI)

Lau Associates Llc sold out a holding in Cummins Inc. The sale prices were between $142.02 and $175.37, with an estimated average price of $159.97.

Sold Out: BlackRock Inc (BLK)

Lau Associates Llc sold out a holding in BlackRock Inc. The sale prices were between $405.47 and $482.46, with an estimated average price of $445.43.

Sold Out: Aberdeen Standard Physical Swiss Gold Shares ETF (SGOL)

Lau Associates Llc sold out a holding in Aberdeen Standard Physical Swiss Gold Shares ETF. The sale prices were between $133.38 and $149.88, with an estimated average price of $142.02.

Sold Out: McDonald’s Corp (MCD)

Lau Associates Llc sold out a holding in McDonald’s Corp. The sale prices were between $206.3 and $221.15, with an estimated average price of $214.42.

Sold Out: Costco Wholesale Corp (COST)

Lau Associates Llc sold out a holding in Costco Wholesale Corp. The sale prices were between $263.55 and $303.76, with an estimated average price of $281.41.

Sold Out: The Walt Disney Co (DIS)

Lau Associates Llc sold out a holding in The Walt Disney Co. The sale prices were between $129.96 and $146.39, with an estimated average price of $138.33.

Here is the complete portfolio of LAU ASSOCIATES LLC. Also check out:

1. LAU ASSOCIATES LLC’s Undervalued Stocks

2. LAU ASSOCIATES LLC’s Top Growth Companies, and

3. LAU ASSOCIATES LLC’s High Yield stocks

4. Stocks that LAU ASSOCIATES LLC keeps buying