Despite the surge in M&A and even IPOs, shares of Jefferies Group
Fiscal first-quarter revenues inched up only 1% to $418.8 million, while earnings increased 7% to $62.3 million, or $0.42 per share. By comparison, Jeffries enjoyed a particularly strong first quarter in 2005.
Jefferies continues to snag plum assignments. Its latest engagements include the buyouts of Kronos
One trouble spot for Jefferies was its principal trading, where revenue fell 10%, to $144.4 million. The company also endured a 55% plunge in revenues in its asset management business. These segments can be volatile, but investors should nonetheless monitor this weakness; in such a highly competitive industry, it could linger for some time.
Jefferies appears to be gaining traction in its joint venture with MassMutual, which grants investment banking clients access to debt capital. Unfortunately, the arrangement remains in the early stages, and it will take time to move the needle for Jefferies.
Trading at 20 times earnings, Jefferies is valued similarly to other mid-tier investment banks like Lazard
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