As we approach the end of a tumultuous 2011, it's time to look back at the biggest winners and losers of the year.
So in this series, that's exactly what we're doing, sector by sector. Today, let's take a look at the biggest losers among public investment-advice companies. The lines get murky in the financial space, but to get technical, these are the companies classified as "investment advice" as opposed to "investors" based on primary SIC industry. I'll hit that industry in another article. First, the backstory, then the results.
This year, we saw U.S. Treasuries get downgraded from AAA status while Congress played politics instead of fixing the budget, a domestic economy that has been recovering from its financial crisis in fits and starts, big trouble in Europe, and a Chinese economy that doesn't seem so bulletproof.
The effect on the financial industry as a whole has been tremendous, and the investment-advice area has been predictably rocky. There have been big winners, but there have been two to three times as many big losers.
The 10 worst investment-advice companies of 2011
For context, the S&P 500 has returned 2.4% after dividends this year. In other words, the market has been basically flat.
2011 Dividend-Adjusted Return
Price-to-Tangible Book Value
|Noah Holdings Limited (NYSE: NOAH )||(68.8%)||2.2|
|Artio Global Investors (NYSE: ART )||(66.4%)||1.8|
|Greenhill & Co. (NYSE: GHL )||(53.5%)||8.4|
|Janus Capital Group||(50.4%)||NM*|
|Och-Ziff Capital Management Group LLC||(42.9%)||NM*|
|Fortress Investment Group LLC (NYSE: FIG )||(40.9%)||1.4|
|Federated Investors (NYSE: FII )||(39.7%)||NM*|
|Lazard (NYSE: LAZ )||(33.5%)||8.1|
|Legg Mason (NYSE: LM )||(32.7%)||8.3|
Source: S&P Capital IQ.
*Has a negative tangible book value, so its price-to-tangible book value isn't meaningful.
Not surprisingly given the financial environment, 2011 hasn't been kind to these various investment-advice companies. We still see some high price-to-tangible book values, but the more service-driven these companies are, the less that's a meaningful measure. If you're looking at P/E ratios, Artio, Janus, and Federated all have sub-10 ratios and meaningful dividend yields.
For folks looking for other opportunities in the financial space, let me leave you with a dividend-producing regional bank that has some of the best operational numbers I've ever seen. I wrote about it in our brand new free report: "The Stocks Only the Smartest Investors Are Buying." I invite you to take a free copy to find out the name of the bank I believe Warren Buffett would be interested in if he could still invest in small banks.