Goldman Sachs (GS) To Boost Commodities Unit With New Hires

Having reported a weak results for commodities in the last earnings season, Goldman Sachs Group Inc. (NYSE:GS) is looking to recover by recruiting high-profile sales people and attracting new clients.

The news was first reported by Bloomberg, citing people familiar with the matter.

The bank has engaged its top executives to get corporate clients from various industries such as energy, power, mining and more. Further, Goldman has been keeping a close watch on the unit’s performance for quite some time now.

Goldman’s commodities unit, which currently employs about 180 people, had been refraining itself from replacing senior employees in order to control costs.Management has decided to shift its focus from controlling costs to improving the unit’s performance.

Last month, the bank’s Chief Financial Officer Marty Chavez attributed the poor performance of commodities unit to lower client activity and the market backdrop.

However, these are not the only factors responsiblefor the poor performance of the unit. Goldman bore heavy losses when its traders failed to make a correct bet on the direction the prices of natural gas would move. Further, it lost again for holding a long position in oil, whereas prices fell 11%, per the article.

Goldman is one of the largest commodity traders and has stuck to its business whereas its competitors like JPMorgan Chase & Co. (NYSE:JPM) and Morgan Stanley (NYSE:MS) curtailed.

Shares of Goldman have lost 12.1% over the past six months, compared to 8.8% decline for the industry.

Currently, the stock carries a Zacks Rank #4 (Sell).

A better-ranked stock in the financial space is Comerica Incorporated (NYSE:CMA) . The company’s Zacks Consensus Estimate for current-year earnings have been revised 3.1% upward over the last 60 days. Also, its shares have gained 50% in a year’s

time.It carries a Zacks Rank #2 (Buy).You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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