Stocks & Investing
Stocks and Investing
Stocks and Investing
Thu, May 19, 2011 KBW, ETFC, IBKR, JMP, FBCM, RODM, Finance-Investment Brokers Stocks Undervalued
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. KBW INC (NYSE:KBW), E*TRADE FINANCIAL CORP (NASDAQ:ETFC), INTERACTIVE BROKERS GRO-CL A (NASDAQ:IBKR), JMP GROUP INC (NYSE:JMP), FBR CAPITAL MARKETS CORP (NASDAQ:FBCM), RODMAN & RENSHAW CAPITAL GRP (NASDAQ:RODM) 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
KBW KBW INC $21.22 $27.18 21.90% Undervalued Finance-Investment Brokers
ETFC E*TRADE FINANCIAL CORP $15.89 $63.56 75.00% Undervalued Finance-Investment Brokers
IBKR INTERACTIVE BROKERS GRO-CL A $16.94 $17.80 4.80% Undervalued Finance-Investment Brokers
JMP JMP GROUP INC $7.60 $7.77 2.20% Undervalued Finance-Investment Brokers
FBCM FBR CAPITAL MARKETS CORP $3.60 $5.29 31.90% Undervalued Finance-Investment Brokers
RODM RODMAN & RENSHAW CAPITAL GRP $1.64 $2.18 24.80% 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.
KBW INC (NYSE:KBW) - KBW, Inc., through its subsidiaries, operates as an investment bank specializing in the financial services industry in the United States and Europe. It provides various investment banking services, including mergers and acquisitions and other strategic advisory services, equity and fixed income securities offerings, and mutual thrift conversions; and equity and fixed income sales and trading. The company also offers research services comprising fundamental and objective analysis that identifies investment opportunities and assists investor to make investment decisions; and asset management services consisting of investment management and other advisory services to institutional clients, private high net worth clients, and various investment vehicles. It serves bank and thrift holding companies, banking and insurance companies, thrift institutions, broker-dealers, mortgage banks, asset management companies, mortgage and equity real estate investment trusts, consumer and specialty finance firms, financial processing companies, and securities exchanges. The company was founded in 1962 and is headquartered in New York, New York.
E*TRADE FINANCIAL CORP (NASDAQ:ETFC) - E*TRADE Financial Corporation, through its subsidiaries, provides online brokerage and related products and services primarily to individual retail investors under the E*TRADE Financial brand name worldwide. It provides various brokerage products and services, including automated order placement and execution of the U.S. equities, futures, options, exchange-traded funds, and bond orders; access to E*TRADE Mobile Pro, which allows customers to trade stocks and transfer funds between accounts, as well as to monitor real-time investment, market, and account information; access to Power E*TRADE Pro, a desktop trading software for active traders; margin accounts allowing customers to borrow against their securities; access to international equities; and sweep deposit accounts that automatically transfer funds to and from customer brokerage accounts, as well as employee stock option management software and services for corporate customers. The company also offers access to the investor resource center, which provides an aggregated view of its investing tools, market insights, independent research, education, and other investing resources; advisory services, such as investment guidance; and fixed income tools to help customers identify, evaluate, and implement fixed income investment strategies. In addition, it provides access to Retirement QuickPlan, a retirement planning tool that provides an assessment of an individuals or a familys retirement savings and investing plan, as well as tips to help get on track with personal retirement goals; individual retirement accounts; access to non-proprietary exchange-traded funds and mutual funds; investing and trading educational services via online videos, Web seminars, and Web tutorials; and deposit accounts, including checking, savings, and money market accounts. The company was founded in 1982 and is based in New York, New York.
INTERACTIVE BROKERS GRO-CL A (NASDAQ:IBKR) - Interactive Brokers Group, Inc. operates as an automated global electronic market maker and broker. It engages in routing orders, and executing and processing trades in securities, futures, and foreign exchange instruments on approximately 80 electronic exchanges and trading venues worldwide. The company provides bid and offer quotations on approximately 600,000 securities and futures products listed on electronic exchanges. It also offers order management, trade execution, and portfolio management platform to access financial markets, and trade in multiple asset classes, such as stocks, options, futures, foreign exchange, bonds, and mutual funds. The company offers its services primarily to institutional and individual customers. Interactive Brokers Group, Inc. was founded in 1977 and is headquartered in Greenwich, Connecticut.
JMP GROUP INC (NYSE:JMP) - JMP Group Inc., through its subsidiaries, operates as an investment banking, asset management, and corporate credit management company in the United States. The company provides various investment banking products and services, such as capital raising, mergers and acquisitions transaction, and other strategic advisory services to corporate clients. It also offers sales and trading, and related brokerage services to institutional investors; and proprietary equity research in six industries, including business services, consumer, financial services, healthcare, real estate, and technology industries. In addition, the company provides asset management products and services to institutional investors, high net-worth individuals; and involves in the management of collateralized loan obligations. JMP Group Inc. was founded in 1999 and is headquartered in San Francisco, California with additional offices in New York, New York; Boston, Massachusetts; Chicago, Illinois; and Atlanta, Georgia.
FBR CAPITAL MARKETS CORP (NASDAQ:FBCM) - FBR Capital Markets Corporation, through its subsidiaries, provides investment banking, institutional brokerage, and asset management services primarily in the United States. It offers capital raising services, including underwriting and placement of public and private equity and debt; financial advisory services, such as merger and acquisition advisory, restructuring, liability management, recapitalization, and strategic alternative analysis; institutional sales and trading services focused on equities, equity-linked securities, high-yield bonds, senior debt, and bank loans; research coverage; and asset management services through a family of mutual funds. The companys principal investing activity consists primarily of investments in merchant banking and short-term liquid instruments. It primarily serves capital markets business in the consumer, diversified industrials, energy and natural resources, financial institutions, healthcare, insurance, real estate, technology, media, and telecommunications sectors. The company was founded in 2006 and is headquartered in Arlington, Virginia.
RODMAN & RENSHAW CAPITAL GRP (NASDAQ:RODM) - Rodman & Renshaw Capital Group, Inc., through its principal subsidiary, Rodman & Renshaw, LLC, provides investment banking services to public and private companies operating in the life science/healthcare, energy, metals/mining, financial services, and cleantech sectors in the United States and China. It offers corporate finance in a range of financing alternatives, including private placements, private investments in public equity, registered direct offerings, and underwritten public offerings. The company also provides strategic advisory services on a range of transactions comprising mergers, acquisitions, and asset sales, as well as provides sales and trading, and equity research services. In addition, it designs investment conferences that bring together companies, institutional investors, business development executives, and experts. Further, the company makes principal investments in early-stage biotechnology and life sciences companies. Rodman & Renshaw Capital Group, Inc. was founded in 2002 and is headquartered in New York, New York.
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