A report on Brokers dated September 16, issued by analysts Doug Sipkin and Justin LaSalle-Tarantin of Susquehanna Financial Group, LLC, highlights strong capital market activity trends in the last week.
Indicative of better times for the brokerage space, global corporate debt floatation last week was $138B, including the mega-issue by Verizon Communications Inc. (NYSE:VZ). This just missed January’s record for this year by a whisker.
Dov Gertzulin's DG Capital is having a strong year. According to a copy of the hedge fund's letter to investors of its DG Value Partners Class C strategy, the fund is up 36.4% of the year to the end of June, after a performance of 12.8% in the second quarter. The Class C strategy is Read More
Global equity issues moved from strength to strength notching up $16.5B last week, boosted by international activity. In the U.S., a lot of volume is expected this week with 10 IPOs scheduled to go to market.
Muni’s were comparatively better at $5.8B but still running below trend due to the pressure from rising interest rates as well as location-specific concerns such as in Detroit.
The hawkish Summers is no longer in the running for the top job at the Fed, and this news led to some flattening in the fed fund futures curve, as seen by the blue line (post-Summers-exit) versus the previous curve represented by the orange line in the graph below.
The above data points to happier times for Brokerages, and the analysts maintain the following ratings on stocks in that space:
The price targets have been calculated on the basis of 12x 2014 EPS of $16.16 for Goldman Sachs Group Inc (NYSE:GS) a 17x 2014 EPS of $1.70 for LPL Financial Holdings Inc (NASDAQ:LPLA), and a 14x 2014 EPS of $2.81 for Raymond James Financial, Inc. (NYSE:RJF).