Now that the big rush of springtime earnings is well behind us, it's time to look forward to earnings from Wall Street's elite, the investment banks. Leading the charge is Lehman Brothers
After the earnings are released, we'll have plenty of data to dig into. But before that happens, let's step back and take a look at what investors think about Lehman as a long-term investment. To gain this insight, I've tapped into Motley Fool CAPS, where nearly 30,000 investors have joined together to offer their thoughts on more than 4,600 companies, Lehman among them. Here's what Fools have to say about the company.
Up or down?
A total of 284 investors have weighed in on Lehman, and the community has collectively said "eh."
Out of a possible five stars, Lehman has been given three -- right smack in the middle. Overall, 91% of players who have weighed in on Lehman have given it the thumbs-up. When it comes to the CAPS All-Stars -- those investors who are in the top 20% of all CAPS players -- Lehman was given the nod a slightly better 92% of the time.
Among comparable stocks, Lehman finds itself stuck in the middle of the pack on CAPS.
|
Stock |
CAPS Rating |
|---|---|
|
Goldman Sachs |
**** |
|
Bear Stearns |
*** |
|
KBW |
*** |
|
Lehman Brothers |
*** |
|
Merrill Lynch |
*** |
|
Morgan Stanley |
*** |
|
Cowen Group |
* |
Wall Street vs. Main Street
When we turn to the Wall Street types, we find a good deal of waffling -- of the 20 analysts following Lehman, 11 have hold ratings on the stock. Of the analysts who picked a direction, all nine have called the stock an outperformer.
Despite its solid performance, the stock has lost some ground since the start of 2007, and it is now trailing the S&P over the past 12 months. Over the past year, Lehman is up 13% versus 17% for the S&P.
Bull pitch
CAPS player CodeCracker is one of the 259 Lehman bulls on CAPS. CodeCracker shares:
Lehman's share price has gone "on sale," declining from the mid-80s to the low 70s due to worry about a slowdown in the mortgage market and worry, in particular, about a bust in the sub-prime market. Meanwhile the company's traditional business, including trading, funding municipalities, and managing assets proceeds nicely. Currently the stock is valued at about 9 times '08 earnings -- a considerable discount vs. the company's projected growth rate of 12%. Over a 3 to 5-year period, [Lehman] has been the best-performing investment bank -- and based on the company's hearty growth in asset management (now 14% of company revenues), it is likely to continue to lead the category.
Bear pitch
On the flip side, Lehman bear JUMPKIS said:
[Lehman Brothers is a] classic i-bank trap. Everyone expects so much of [the big investment banks], that the first sizable slip will kick them around.
[Lehman] is popular now, but they've stumbled significantly in the past. I suggest Wikipedia-ing them. [It's] not nearly as stable or diversified as Morgan Stanley. Wall Street is cut throat, [and Lehman] has a lot of knives pointed at it.
Who said that?
To read more from the wise Fools who penned these words, and explore the wealth of additional financial data we've put together on the company, just click here.
Fool contributor Matt Koppenheffer does not own shares of any of the companies mentioned. The Fool's disclosure policy had a page on MySpace but became way too popular and ended up spending all of its time updating its photos.
