Author Topic: JEF - Jefferies Group  (Read 595197 times)

cpan

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Re: JEF - Jefferies Group
« Reply #440 on: November 24, 2012, 09:02:16 AM »
Regarding JEF's business, it looks pretty good given the historical book value growth.   Could someone share what they would worry about JEF's business?  Does the business have to be run lemming like where you are forced to do the worst deal that your competitor is willing to write?  Or is it because risk management will never have good control over the deal makers?  Can't they just be the middle man or is the competition too tough to do that?   I know the reliance on short term funding issue which maybe LUK merger may or may not resolve given LUK doesn't have a reliable earning stream either (or maybe the cows does come home :-)).   I appreciate any insight you may have. 


ShahKhezri

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Re: JEF - Jefferies Group
« Reply #441 on: November 24, 2012, 11:41:01 AM »
Having transitioned to a role within the capital markets over the past 6 months and heading into bonus time in the next 3 months I can say a couple of things:

1.  Expectations are lowered every month or so.
2.  The addition of clawbacks on bonuses with a 5 year tail make it very hard to do something stupid just to push up your compensation.
3.  Every group has a respective pool.  DCM, IB, Structured Products, S&T.

I don't know how it's done at JEF, but Handler will own a lot of combined LUK.  The disasters that happened with the other IB's, the compensation was mostly up front with some stock compensation.  It's definitely a good question to ask at the annual meeting. 

Ideally, what I'd like to see from LUK/JEF is a business that has two engines, not both of them need to work at the same time, business can be great at JEF and ok at LUK during the really good times and ok at JEF and great for LUK (because you would think capital would be redeployed from JEF to LUK to buy cheap assets). 

About 14% of my portfolio consists of the LUK/JEF combination. 

Myth465

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Re: JEF - Jefferies Group
« Reply #442 on: November 25, 2012, 03:08:09 PM »
Would you guys buy LUK or JEF now. I know I am being lazy. I am sure someone has already done the math. I am very interested, now that they have cleaned up the portfolio and have a business which throws off consistent cash. I plan to buy a position and follow for the next few years to learn about IB.

boilermaker75

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Re: JEF - Jefferies Group
« Reply #443 on: November 26, 2012, 06:28:35 AM »
Would you guys buy LUK or JEF now. I know I am being lazy. I am sure someone has already done the math. I am very interested, now that they have cleaned up the portfolio and have a business which throws off consistent cash. I plan to buy a position and follow for the next few years to learn about IB.


JEF is trading at a discount to what you will obtain IF the merger goes through. So if you think there is a high certainty of the merger happening you would gain a little more in the long run by buying JEF.

gfp

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Re: JEF - Jefferies Group
« Reply #444 on: November 26, 2012, 07:46:23 AM »
Would you guys buy LUK or JEF now. I know I am being lazy. I am sure someone has already done the math. I am very interested, now that they have cleaned up the portfolio and have a business which throws off consistent cash. I plan to buy a position and follow for the next few years to learn about IB.


JEF is trading at a discount to what you will obtain IF the merger goes through. So if you think there is a high certainty of the merger happening you would gain a little more in the long run by buying JEF.

The deal is very likely to go through, but don't forget to factor in the Crimson Wine spin-off.  JEF holders won't get Crimson shares, LUK holders will.

LC

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Re: JEF - Jefferies Group
« Reply #445 on: November 26, 2012, 09:58:54 AM »
Would you guys buy LUK or JEF now. I know I am being lazy. I am sure someone has already done the math. I am very interested, now that they have cleaned up the portfolio and have a business which throws off consistent cash. I plan to buy a position and follow for the next few years to learn about IB.


JEF is trading at a discount to what you will obtain IF the merger goes through. So if you think there is a high certainty of the merger happening you would gain a little more in the long run by buying JEF.

The deal is very likely to go through, but don't forget to factor in the Crimson Wine spin-off.  JEF holders won't get Crimson shares, LUK holders will.

Thanks for reminding...I was thinking about a buy JEF/sell LUK arbitrage opportunity until you reminded me of the Crimson divestiture.

For the interested, the trade would have been:

-Merger terms: JEF owners receive .81 shares of LUK after transaction
-LUK trades @ $20.88 as of this writing
-Implies a JEF share price of ($20.88 * .81) or $16.91
-JEF trades at $15.97

Therefore: Sell LUK / Buy JEF in equal dollar amounts.
"Lethargy bordering on sloth remains the cornerstone of our investment style."
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BargainValueHunter

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Re: JEF - Jefferies Group
« Reply #446 on: November 26, 2012, 10:44:58 AM »
Credit:onefamilysblog.com



 
Albert Einstein called compound interest "the greatest mathematical discovery of all time".

mcliu

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Re: JEF - Jefferies Group
« Reply #447 on: November 26, 2012, 01:00:02 PM »
I think you should subtract the $0.81 and the $0.25 missed dividend from the current trading price of LUK before multiplying by the conversion factor.

So example, $20.88 - $0.81 (Crimson Spinoff) - $0.25 (Missed Dividend) = $19.82 x 0.81 = $16.05 implied price of JEF

Does anyone have any details or opinions on some of LUK's operating assets like National Beef, Conwed, and some of their more esoteric assets, like Sangart and the Gasification projects? I'm curious as to the thesis behind the biotech/energy initiatives and what the potential returns are. As an investor in JEF, I feel more comfortable with the investment bank and some of their operating assets, but less comfortable with these random projects.

txlaw

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abcd

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Re: JEF - Jefferies Group
« Reply #449 on: November 28, 2012, 09:32:35 AM »
I think you should subtract the $0.81 and the $0.25 missed dividend from the current trading price of LUK before multiplying by the conversion factor.

So example, $20.88 - $0.81 (Crimson Spinoff) - $0.25 (Missed Dividend) = $19.82 x 0.81 = $16.05 implied price of JEF

Does anyone have any details or opinions on some of LUK's operating assets like National Beef, Conwed, and some of their more esoteric assets, like Sangart and the Gasification projects? I'm curious as to the thesis behind the biotech/energy initiatives and what the potential returns are. As an investor in JEF, I feel more comfortable with the investment bank and some of their operating assets, but less comfortable with these random projects.

Don't you have to add at least one $.075 (actually it should be approximately 30% more, so about $.0975) that you are likely to get from Jeffries?