Author Topic: JEF - Jefferies Group  (Read 604280 times)

Myth465

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Re: JEF - Jefferies Group
« Reply #750 on: April 13, 2014, 08:14:02 PM »
I dont think they need to provide more detail. They give alot of details in the rolling PPT updates. Perhaps just different styles.


jouni1

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Re: JEF - Jefferies Group
« Reply #751 on: April 19, 2014, 01:04:00 AM »
any fresh thoughts on leucadia? seems that it could be cheap here. jefferies will probably have a great year. i also like the portfolio now. good, basic businesses that might benefit from being part of the group (access to capital etc). i think handler might be the real thing. seems humble (for a banker) and i have a feeling he's going to be in the billionaire club when he's done with banking. he gets paid a lot but he is the man to run this. also holds a quarter billion worth of stock.

handler said he's going to be opportunistic with buybacks, but having seen none probably means:

1) it's not cheap
2) there's better places to put the money (garcadia, berkadia?) or
3) he doesn't want to do a possibly "overpriced" buyback so soon after the merger, as if to not give a bad impression

i like it at these prices, even though i sold mine for a bit less. it would just be so easy to start buying if they were doing buybacks. it just feels like the market hates it now, and it might go to 0.6x book on some bad news.
« Last Edit: April 19, 2014, 01:10:01 AM by jouni1 »

thefatbaboon

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Re: JEF - Jefferies Group
« Reply #752 on: April 19, 2014, 02:46:43 AM »
I think the options you are looking at are old Jefferies options that are now based on .81 of a LUK share [81 shares per contract], that's why the pricing looks odd.  LUK2 vs LUK.

http://www.cboe.com/publish/TTStockSM/13-086.pdf

http://www.ise.com/assets/documents/optionsExchange/productNotices/equity_corp_actions/2013/2013-026$Jefferies_Group_Inc_(JEF)_-_Merger_With_Leucadia_National_Corporation_(LUK)$20130228.pdf

Sorry, should have checked the thread.  Thanks

scorpioncapital

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Re: JEF - Jefferies Group
« Reply #753 on: April 19, 2014, 10:53:58 AM »
I think many investors have a misperception about stock buybacks. Buybacks have many motives and purposes but one that is seldom spoken about is the purpose of covering up inability to grow and poor returns on investment. Inability to grow, in turn, impacts valuations and prospects. Therefore a distinction should be made between returning money to shareholders and opportunity. They are inversely related. I've seen several financial firms buy back stock to mask the fact that they aren't able to find opportunities to reinvest at a decent return. I at least applaud LUK for not doing that. The financial sector has provided poor returns in the last few years (look at JPM and GS) but that can quickly change.

This chart suggests a substantial opportunity - http://lakecharlescleanenergy.com/wp-content/uploads/2014/03/LCCE-Timeline.jpg

I expect an announcement sometime this year on the board of directors signing off on this project. I have seen estimates that this business can generate $200-$400 million per year in income. At the low end, on an equity investment of $500 million, is a 40% ROI. I don't think the market is pricing in the value of this project at all. It could be worth $2-3 billion or about $6-8 per Leucadia share.

Likewise, the carrying book value of Garcadia & Berkadia underestimates their current earning power, although National Beef's carrying value may overestimate it's earning power at the moment. Linkem is also an interesting animal. It very well could see an IPO and is growing fast.

Tangentially related, Greenspan's new book, 'The map and the territory' is an excellent read. It tries to answer the question of why there is a hesitancy to invest in long-lived assets and he argues that the uncertainty of social security liabilities and future tax rates is causing companies to build up cash and be fearful to invest in these long-range projects. This has a host of implications for unleashing some inflation. He also makes the interesting comment that we are not in a bubble because there is still substantial uncertainty and a prerequisite for bubble formation is a long period of relative calm and stability.
« Last Edit: April 19, 2014, 11:01:38 AM by scorpioncapital »

jouni1

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Re: JEF - Jefferies Group
« Reply #754 on: April 19, 2014, 12:07:13 PM »
yeah lake charles and a year after that hopefully oregon lng export build starting up. it's going to be huge for the company.

even without the new facilities, i think it could be a decent investment at these prices.

thefatbaboon

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Re: JEF - Jefferies Group
« Reply #755 on: April 19, 2014, 12:26:53 PM »
Any recommendations regarding how we should be calculating book value?  There's $1.7bn of goodwill from the JEF acquisition - you leave that it or take it out?  Also, I guess we have to adjust shares outstanding for the 14m odd RSUs?  They're all non-pay as far as I can tell so that's pure dilution with no cash offset.

I'd be interested in thoughts on how JEF is performing.  Looking at last year if I back out the gains from Harbinger, Knight, and acquisition accounting debt premiums, they scarcely seem to have made any money at all. 
« Last Edit: April 19, 2014, 12:32:28 PM by thefatbaboon »


LC

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Re: JEF - Jefferies Group
« Reply #757 on: April 20, 2014, 11:33:11 AM »
Poor baby :/
"Lethargy bordering on sloth remains the cornerstone of our investment style."
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racemize

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Re: JEF - Jefferies Group
« Reply #758 on: May 09, 2014, 09:06:57 AM »
10-Q is out:
http://finance.yahoo.com/news/leucadia-national-corporation-announces-first-130600380.html
http://www.sec.gov/Archives/edgar/data/96223/000009622314000016/lnc1stqtr2014form10q.htm

I previously thought we'd get some decent earnings from Jefferies (on a per share basis), but earnings and growth in BVPS have been pretty low over the last year.  Hopefully they will find some good use for the capital...

mcliu

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Re: JEF - Jefferies Group
« Reply #759 on: May 09, 2014, 10:44:48 AM »
I thought Jefferies is actually doing pretty well. $200M before tax is pretty good results in this environment.

The beef business is really dragging down results. I wish there's more disclosure on how they're planning to turn National Beef around..