JEF - Jefferies Group

[decko]

Their quarter ended Feb29th  had record Revs of 1.386 bill, and an all time high 343 mill advisory fees, obviously a different story before this mess started.  Is this company finally, truly, a great investment at these price? What are their challenges going forward? 

[thepupil]

Jefferies has killed it for 2 quarters in a row

[ukvalueinvestment]

From a financial perspective: Great results.  Surely this will rerate (and they are buying back stocks anyway).

From a human perspective, they raised $9,25ln in memory of their CFO who died of COVIC-19 and I liked this:

"Finally, we implore everyone to wear a mask when out in public. When you wear a mask, you do it out of respect for your fellow humans and we believe masks (and testing) will be critical to allowing all of us to protect those most at risk as our medical experts work tirelessly to develop the needed therapeutics, vaccines and methods of delivering them in mass quantities. Working together will allow us all to best navigate this incredibly difficult period and bridge our path to a more normal way of life that we will never take for granted."

[A_Hamilton]

Jefferies has killed it for 2 quarters in a row

Yeah, but we need to see how they are getting to their marks on Jefferies Finance (JFIN JV with Mass Mutual that is levered with CLO's) and then how they are coming up with their fair value mark on Vitesse. They still have Vitesse marked at ~$550 million in equity value. Sure it has hedged oil at $65 this year, but WTI at $39 beyond that does not do wonders for Vitesse. It can't be the only name in the Bakken to not have lost value.

[thepupil]

Jefferies has killed it for 2 quarters in a row

Yeah, but we need to see how they are getting to their marks on Jefferies Finance (JFIN JV with Mass Mutual that is levered with CLO's) and then how they are coming up with their fair value mark on Vitesse. They still have Vitesse marked at ~$550 million in equity value. Sure it has hedged oil at $65 this year, but WTI at $39 beyond that does not do wonders for Vitesse. It can't be the only name in the Bakken to not have lost value.

I agree with you and sold in early March for this reasons (see a couple posts up). That decision has been very additive to only slightly so based on subsequent drawdown and recovery of things purchased with JEF proceeds. Nevertheless, I am positively surprised by the operating results (though I agree more write downs are likely). I bought a starter position. Every time I’ve bought JEF in the mid teens it’s worked out, but would like to see more write downs before buying a real position.

[A_Hamilton]

Jefferies has killed it for 2 quarters in a row

Yeah, but we need to see how they are getting to their marks on Jefferies Finance (JFIN JV with Mass Mutual that is levered with CLO's) and then how they are coming up with their fair value mark on Vitesse. They still have Vitesse marked at ~$550 million in equity value. Sure it has hedged oil at $65 this year, but WTI at $39 beyond that does not do wonders for Vitesse. It can't be the only name in the Bakken to not have lost value.

Also, they don't trade too often, but the JFIN 2024's are trading at a >10% YTM. I hope JEF is trying to buy these in if they are marking the book of JFIN with little change since year end...
I agree with you and sold in early March for this reasons (see a couple posts up). That decision has been very additive to only slightly so based on subsequent drawdown and recovery of things purchased with JEF proceeds. Nevertheless, I am positively surprised by the operating results (though I agree more write downs are likely). I bought a starter position. Every time I’ve bought JEF in the mid teens it’s worked out, but would like to see more write downs before buying a real position.