Over the past year, the surge in M&A and private equity has boosted the stock prices of companies like Goldman Sachs
In the fiscal fourth quarter, revenues increased from $75.2 million to $79.6 million, and net income increased from $7.1 million to $8.7 million. (There's no earnings-per-share comparison because, in the fourth quarter of 2005, the company was privately held.)
There was certainly lots of M&A and IPO activity in the fourth quarter, with TWP's investment banking revenues increasing 33% to $37.3 million (the biggest quarter since 2001). Some of the deals include the IPOs of Double-Take Software and Netlist, as well as advisory engagements on AT&T's
TWP is also reaping the benefits from its private equity investments. That is, over the years, the firm has set up a variety of funds to invest in early-stage companies. As these portfolio investments go public or sell out, it turns into nice gains. Keep in mind that, for the typical private equity fund, the manager gets 20% to 25% of the gains.
What does this mean for TWP? Well, in the fourth quarter, the firm scored $5.9 million in earnings from private equity investments -- more than double last year.
CFO Robert West recently left the TWP. This should always be a red flag; then again, turnover is common in the financial services industry. For example, look at the recent CFO departures at Bank of America
Of course, the most critical person for TWP is Mr. Weisel, who is a legend in tech finance. In the late 1970s, he co-founded Montgomery Securities, which he sold to NationsBank in 1997.
During the fourth-quarter conference call, Mr. Weisel was definitely upbeat on the tech space. So far this year, TWP is engaged with seven IPOs and five M&A deals. The tech sector can be volatile, but if the tech bull market continues and IPOs perk up, it's probably only a matter of time until TWP's stock price gets a lift.
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Fool contributor Tom Taulli does not own shares mentioned in this article.