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AI, KCG, MF, RJF, PJC, GFIG, Finance-Investment Brokers Stocks Undervalued

^{Published on 2011-05-19 07:20:45 - WOPRAI}
 

May 19, 2011/ M2 PRESSWIRE / BUYINS.NET / http://www.squeezetrigger.com is monitoring the Finance-Investment Brokers sector and these stocks are the most undervalued as of today. ARLINGTON ASSET INVESTMENT-A (NYSE:AI), KNIGHT CAPITAL GROUP INC-A (NYSE:KCG), MF GLOBAL HOLDINGS LTD (NYSE:MF), RAYMOND JAMES FINANCIAL INC (NYSE:RJF), PIPER JAFFRAY COS (NYSE:PJC), GFI GROUP INC (NYSE:GFIG) are all expected to go Up as they are Undervalued according to industry standard valuation metrics. The valuation model employs a three-factor approach to stock valuation using fundamental variables--the company's trailing 12-month Earnings-Per-Share (EPS), the analyst consensus estimate of the company's forecasted 12-month EPS, and the 30-year Treasury yield--to create a highly accurate reflection of a company's fair value.

The chart below displays the projected Fair Value and Valuation discount/premium of the most undervalued stocks in the highlighted industry group:

     Symbol     Company Name                        Last Close     Fair Value     Valuation                   Industry               
     AI         ARLINGTON ASSET INVESTMENT-A        $27.35         $109.40        75.00% Undervalued          Finance-Investment Brokers
     KCG        KNIGHT CAPITAL GROUP INC-A          $12.62         $15.33         17.70% Undervalued          Finance-Investment Brokers
     MF         MF GLOBAL HOLDINGS LTD              $7.96          $8.11          1.80% Undervalued           Finance-Investment Brokers
     RJF        RAYMOND JAMES FINANCIAL INC         $34.98         $35.69         2.00% Undervalued           Finance-Investment Brokers
     PJC        PIPER JAFFRAY COS                   $32.89         $52.22         37.00% Undervalued          Finance-Investment Brokers
     GFIG       GFI GROUP INC                       $4.65          $6.90          32.60% Undervalued          Finance-Investment Brokers

Here are some of the variables that are utilized when calculating the Fair Market Valuation of a stock: Long-run EPS growth rate, Duration of Business-growth-cycle, Volatility of EPS growth rate, Systematic or beta risk of the firm, Correlation between the firm's EPS and the interest rate environment, EPS growth volatility, Dividend payout ratio, Buffer earnings, Interest rate related criteria: Interest rate (30 year yield) long-run level, Duration of interest rate cycle, Interest rate volatility. The Fair Market Valuation uses 12-month historic and forecasted EPS values and the current 30-year treasury yield as primary determinants. When calculating risk/return values such as the Sharpe ratio, the historic periods used are five years.

Some expected results of the Valuation Model are: the valuation of a stock increases in a declining interest rate environment. Increasing current and/or projected EPS will produce a higher Valuation. While long-term EPS growth would produce a corresponding long-term Valuation increase, concomitant long-term interest rate increases would offset EPS growth and depress the Valuation. The shorter a company's own business cycle, the higher its stock Valuation will be.

ARLINGTON ASSET INVESTMENT-A (NYSE:AI) - Arlington Asset Investment Corp. invests in mortgage-related assets. It acquires and holds residential mortgage-backed securities, which are either issued by a U.S. government agency, or guaranteed as to principal and interest by the U.S. government agencies or the U.S. government-sponsored entities. The company also acquires and holds mortgage-backed securities issued by private organizations. In addition, it holds merchant banking opportunities, including investments in equity securities, mezzanine debt, and senior loans. The company was formerly known as Friedman, Billings, Ramsey Group, Inc. Arlington Asset Investment Corp. was founded in 1989 and is based in Arlington, Virginia.

KNIGHT CAPITAL GROUP INC-A (NYSE:KCG) - Knight Capital Group, Inc., a financial services company, provides market access and trade execution services across multiple asset classes to buy-and sell-side firms, as well as offers capital markets services to corporate issuers and private companies primarily in the United States. The companys Equities segment provides market access and trade execution services in global equities, and futures and options. This segments institutional equity products and services include global equity, option and futures trade execution solutions, block trading, program trading, special situations/risk arbitrage, soft dollar and commission recapture programs, corporate access services, direct market access, EdgeTrade algorithms, and internal crossing. Knight Capital Groups Fixed Income, Currencies, and Commodities segment offers fixed income research, voice sales and trading, and capital markets services. It provides trading across a range of fixed income securities, including corporate bonds, distressed debt, asset-and mortgage-backed securities, federal agency securities, convertible bonds, hybrid securities, syndicated bank loans, and emerging markets. This segment also operates a fixed income electronic communication network (ECN) that serves as an electronic inter-dealer system and allows clients to access live and executable offerings; and foreign exchange ECN, which provides clients with access to live executable prices for 51 currency pairs and spot gold and silver streamed by market maker banks and other clients. The company was formerly known as Knight Trading Group, Inc. and changed its name to Knight Capital Group, Inc. in May 2005. Knight Capital Group, Inc. was founded in 1995 and is headquartered in Jersey City, New Jersey.

MF GLOBAL HOLDINGS LTD (NYSE:MF) - MF Global Holdings Ltd., together with its subsidiaries, operates as a brokerage firm offering customized solutions in global cash and derivatives markets. It provides execution and clearing services for products in the exchange-traded and over-the-counter derivative markets, as well as for products in the cash market. The company primarily offers execution and clearing services for equities, fixed income products, interest rate products, foreign exchange products, and commodities. It also provides research, execution, and clearing services for listed and OTC equity-linked derivatives and cash securities; and execution, clearing, and financing services for fixed income and interest rate derivative products. In addition, the company offers foreign exchange services directly to its clients on an agency and principal basis; and clients execution, clearing, and financing services for transactions relating to derivative contracts, including futures, options, forward sale agreements, and other types of instruments based on the price of metals, steel products, and industrial materials. Further, it provides clearing and execution services for exchange-listed and OTC-traded energy derivatives. The company serves corporate hedgers, asset managers, professional traders, hedge funds, sovereign institutions, and individual investors through employee brokers and sales professionals, introducing brokers, and online platforms. It operates primarily in the United States, the United Kingdom, France, Singapore, Australia, Hong Kong, Canada, India, and Japan. The company was formerly known as MF Global Ltd. and changed its name to MF Global Holdings Ltd. in January 2010. MF Global Holdings Ltd. is based in New York, New York.

RAYMOND JAMES FINANCIAL INC (NYSE:RJF) - Raymond James Financial, Inc., through its subsidiaries, engages in the underwriting, distribution, trading, and brokerage of equity and debt securities, as well as the sale of mutual funds and other investment products in the United States, Canada, and Europe. Its Private Client Group segment provides securities brokerage services, including the sale of equities, mutual funds, fixed income products, and insurance products to their individual clients; and correspondent clearing services to other broker-dealer firms. The companys Capital Markets segment offers securities brokerage, trading, and research services to institutions with a focus on the sale of U.S. and Canadian equities and fixed income products; and manages participation in underwritings, merger and acquisition services, and public finance activities. Raymond James Financials Asset Management segment provides investment portfolio management services, mutual fund management, and trust services, as well as offers fee-based programs for portfolio management services customers. The companys RJ Bank segment offers consumer, residential, and commercial loans, as well as FDIC-insured deposit accounts. Its Emerging Markets segment has interest in joint ventures that operate in securities brokerage, investment banking, and asset management in Turkey and Latin America. The companys Stock Loan/Borrow segment involves in borrowing and lending securities from and to other broker-dealers, financial institutions, and other counterparties, primarily as an intermediary. Raymond James Financials Proprietary Capital segment consists of principal capital and private equity activities, including various direct and third party private equity and merchant banking investments, short-term special situation mezzanine and bridge investments, and private equity funds. The company was founded in 1962 and is headquartered in St. Petersburg, Florida.

PIPER JAFFRAY COS (NYSE:PJC) - Piper Jaffray Companies provides investment banking services, institutional sales, trading and research services, and asset management services worldwide. The company primarily raises capital through equity financings for its middle-market clients operating in various industries, including the business services; clean technology and renewables; consumer; financial institutions; healthcare; industrial growth; and media, telecommunications, and technology. It offers financial advisory services relating to mergers and acquisitions; underwrites debt issuances; and provides financial advisory and interest rate risk management services. The companys public finance investment banking capabilities focus on state and local governments, healthcare, higher education, housing, hospitality, transportation, and commercial real estate industries. Piper Jaffray Companies also offers equity and fixed income advisory and trade execution services for institutional investors, public and private corporations, public entities, and non-profit clients; has equity sales and trading relationships with institutional investors in the United States, Asia, and Europe; and engages in proprietary trading. In addition, it provides asset management services to separately managed accounts, partnerships, and open and closed-end mutual funds; offers an array of investment products comprising small and mid-cap value equity, master limited partnerships focused on the energy industry, as well as fixed income; and invests in private equity and venture capital funds. The company was founded in 1895 and is headquartered in Minneapolis, Minnesota.

GFI GROUP INC (NYSE:GFIG) - GFI Group Inc. provides wholesale brokerage, clearing, electronic execution, and trading support products for financial markets in the United States and internationally. The company offers brokerage and trade execution services, clearing services, market data and trading platform, and other software products to institutional customers. The company provides brokerage services in fixed income derivatives, bond instruments, and other related products; financial instruments, including foreign exchange options, exotic options, non-U.S. Dollar interest rate swaps and options, repurchase agreements, forward and non-deliverable forward contracts, and government and municipal bond options; cash-based and derivative equity products, such as the U.S. domestic and international equity stocks, global depositary receipts, American depositary receipts, and equity derivatives; and cash-based and derivative commodity and energy products comprising oil, natural gas, biofuel, electricity, wet and dry freight derivatives, dry physical freight, precious metals, coal, weather derivatives, property derivatives, emissions, ethanol, and soft commodities. It also offers clearing, brokerage, settlement, and back-office services to proprietary traders, brokers, market makers, and hedge funds; provides capital to start-up trading groups, small hedge funds, market-makers, and individual traders; licenses multi-asset class electronic trading and order management software to brokers, exchanges, and traders in the commodities, fixed income, currencies, and equities markets; and offers FENICS Professional, a suite of price discovery, price distribution, trading, risk management, and straight-through processing components. The company primarily serves investment and commercial banks, large corporations, asset managers, insurance companies, hedge funds, and proprietary trading firms. GFI Group Inc. was founded in 1987 and is headquartered in New York, New York.

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