Why Raymond James Financial, Inc. Shares Might Keep Slumping

Does this analyst make a good case or is it just more noise from Wall Street?

May 21, 2014 at 2:19PM

While Fools should generally take the opinion of Wall Street with a grain of salt, it's not a bad idea to take a look at particularly stock-shaking analyst upgrades and downgrades -- just in case their reasoning behind the call makes sense.

What: Shares of Raymond James Financial (NYSE:RJF) traded sluggishly on Wednesday after Goldman Sachs downgraded the financial holding company from buy to neutral.

So what: Along with the downgrade, analyst Alexander Blostein lowered his price target to $54 (from $59), representing about 12% worth of upside to yesterday's close. So while contrarian traders might be attracted to Raymond James' sharp pullback in recent months, Blostein's call could reflect a sense that its growth headaches still aren't fully baked into the valuation.

Now what: According to Goldman, Raymond's risk/reward trade-off is pretty balanced at this point. "[G]iven the recent deceleration in retail activity and the choppier equity market backdrop, we expect near-term revenue growth to decelerate, pressuring estimates," said Blostein. "Moreover, with the Morgan Keegan acquisition now fully in the run-rate and lack of meaningful capital actions, we see fewer idiosyncratic catalysts to stay attractive." Given Raymond James' strong position in wealth management and still-juicy expansion prospects, however, those short-term concerns might be providing patient Fools with an attractive long-term opportunity.

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Brian Pacampara has no position in any stocks mentioned, and neither does The Motley Fool. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

A Financial Plan on an Index Card

Keeping it simple.

Aug 7, 2015 at 11:26AM

Two years ago, University of Chicago professor Harold Pollack wrote his entire financial plan on an index card.

It blew up. People loved the idea. Financial advice is often intentionally complicated. Obscurity lets advisors charge higher fees. But the most important parts are painfully simple. Here's how Pollack put it:

The card came out of chat I had regarding what I view as the financial industry's basic dilemma: The best investment advice fits on an index card. A commenter asked for the actual index card. Although I was originally speaking in metaphor, I grabbed a pen and one of my daughter's note cards, scribbled this out in maybe three minutes, snapped a picture with my iPhone, and the rest was history.

More advisors and investors caught onto the idea and started writing their own financial plans on a single index card.

I love the exercise, because it makes you think about what's important and forces you to be succinct.

So, here's my index-card financial plan:


Everything else is details. 

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