Goldman Sachs has had a hard time of late - a weak Q2 earnings forecast and a debt default in Greece - prompting concerned investors to abandon the stock.  So much so, that Goldman shares were trading yesterday at their book value, or about $129 a share.  Of course, financials are strong today and, as of 3 p.m., Goldman was trading at $132.30, up $3 for the day.  

The fallen price represents a tough turnabout for Goldman Sachs.  Since April 2009, the Wall Street firm has commanded a premium to its book value, a crucial financial measure that refers to the liquidation value of a company’s assets if it were forced to sell everything.  It's been a point of pride for Goldman that it has traded above this mark, especially since all its big competitors have fallen or stayed below this level since the financial crisis.

Goldman is the last big financial firm to hit this threshold.  Morgan Stanley, which has a book value of $39.09 a share, closed Tuesday at $22.33 a share.  JPMorgan Chase is trading at $39.54 a share and has a current book value of roughly $43 a share.  Both Citigroup and Bank of America trade below their book value, he added.

"The market no longer believes that Goldman should command a premium," said Rochdale analyst Dick Bove, who has a sell rating on the stock, in part because it was trading above book value.

With the drop in price, some opportunistic buyers might view Goldman as a value play - i.e., because they seek out stocks that are trading below book value, a signal the shares could be a bargain.  However, by Mr. Bove’s estimates, Goldman still has a way to go before it reaches bargain status.  Goldman faces uncertainty about its second quarter, ending this week, and the firm's heavy dependence on trading revenue is taking a hit with the recent prolonged market slump. 

And where would Mr. Bove buy Goldman?  "This stock will be a screaming buy when it reaches $100 a share."    [DealBook, 6/28/11]