Author Topic: JEF - Jefferies Group  (Read 598585 times)

thepupil

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Re: JEF - Jefferies Group
« Reply #1560 on: September 16, 2019, 08:07:22 AM »
I'm not sure if NOL's shield investment gains; they potentially only shield operating income. I could be wrong though. Also, who wants to buy 15% of SPB? A stockpicker doesn't want to own that big of a slug, a strategic or PE wants control.

It is annoying, but in general it represents distribution of tangible book value (less a tax haircut on shares held in taxable). That tax haircut is much lower than the healthy discount paid relative to tangible/book/intrinsic value, so I consider it a positive and a nice realization of discount paid. And SPB is arguably cheap, so there's that too.

Also, one can actively swap into tax advantaged accounts to the extent they have shares in taxable that aren't up too much.

Ideally I would've preferred they dribble out (or sell entirely if they could find a buyer) those shares and buy back stock rather than triggering investor level tax, but I'll take it.

I would note, that this makes the bonds incrementally less safe.

Do you think we'll see any forced selling of SPB given the spinoff-like dynamic here?

7.5 million shares of a company that trades 200K to 900K shares a day, average 500K for 2019. 15% of a $2.7 billion company is being distributed to a diffuse group of owners of a $6 billion company. If anything, I would say that it should help SPB's re-rating potential over the long term. It's down 5% today, so I guess it could happen, but my guess of additional downside is no better than the next guy's. my gut is it won't be too dramatic, because the only folks who own JEF are value schmucks like me, same constituency that owns SPB.




ABM

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Re: JEF - Jefferies Group
« Reply #1561 on: September 19, 2019, 06:03:36 AM »
To an extent this was not unexpected. The company redesigned its mgmt comp for Handler & Friedman in 2019 including going as far as clawing back or increasing 2018 target levels. 

Long story short, $16M 2019 RSU comp for each person tied to TSR with 9% target (3Y target ending 11/30/2020 and beg 11/30/2017).  This is adjusted for any dividends and distributions.

So between the 7% SPB dividend and the current dividend yield you reach the 9% target, without breaking a sweat, despite the stock being down since PYE (11/30/18).   

For reference, inclusive of divs & SPB distribution, mgmt is now within 12% of reaching minimum target (6% CAGR) to qualify for some piece of the $16M.  Below 6% CAGR all is forfeited.

See excerpt from proxy

https://i.imgur.com/EycwxPK.png

thepupil

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Re: JEF - Jefferies Group
« Reply #1562 on: September 26, 2019, 01:36:42 PM »
http://ir.jefferies.com/file/Index?KeyFile=399877785

3Q out, made a little dough despite the writedown of very profitable investment in WeWork.

buying back shares, distributing SPB, blah blah blah

ratiman

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Re: JEF - Jefferies Group
« Reply #1563 on: October 03, 2019, 04:23:36 AM »
Did they already sell a portion of their WeWork or did they ride it from $9M to $250M to zero?

Edit: OK it looks like they invested $9M, cashed out $31, valued it last year at ~$250, and now should be ~$0.
« Last Edit: October 03, 2019, 04:26:08 AM by ratiman »

thepupil

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Re: JEF - Jefferies Group
« Reply #1564 on: October 03, 2019, 04:27:27 AM »
$9mm IC, ~3x realized 0-10x+ unrealized depending if you think We is worth $0-$15B.

A great outcome no matter what.


Net income attributable to Jefferies Financial Group common shareholders of $48 million, or $0.15 per diluted share, reflecting solid results at Jefferies Group and certain of our merchant banking investments, offset by a non-cash fair value reduction of $146 million to our investment in The We Company (we invested $9 million in We, have received $31 million in cash and continue to own approximately 0.8% of We's fully diluted shares)

mcliu

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Re: JEF - Jefferies Group
« Reply #1565 on: October 08, 2019, 05:10:40 PM »
Just wondering, what is considered the cost-basis (for Canadian-tax purposes) of the SPB shares being paid as a dividend?

thepupil

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Re: JEF - Jefferies Group
« Reply #1566 on: October 08, 2019, 05:12:29 PM »
I can't speak from a Canadian perspective, but I would imagine its as if you received any dividend in cash. It's a normal taxable dividend, not a distribution, from my understanding.

ukvalueinvestment

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Re: JEF - Jefferies Group
« Reply #1567 on: October 20, 2019, 03:39:13 AM »
What did people think of the investor day.  Management obviously have are frustrated that, in their opinion, they have done all the right things in terms of simplifying the company, but they have been somewhat stymied by headwinds in two of their biggest businesses (energy banking and LevFin).  They also called out a lack of interest in "Value".  All of this makes sense to me.  I am inclined to give them the benefit of the doubt and hold.
@ukvalueinv

scorpioncapital

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Re: JEF - Jefferies Group
« Reply #1568 on: October 20, 2019, 10:51:29 AM »
They're frustrated...but handler goes home to a very nice mansion in new York. Frustration is a narrative to their benefit. Also there's a saying, I paraphrase, if you're incompetent and keep doing the same thing over and over again it's called insanity.


thepupil

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Re: JEF - Jefferies Group
« Reply #1569 on: October 20, 2019, 11:59:28 AM »
They're frustrated...but handler goes home to a very nice mansion in new York. Frustration is a narrative to their benefit. Also there's a saying, I paraphrase, if you're incompetent and keep doing the same thing over and over again it's called insanity.

what precisely is "the same thing over and over again"?