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SWS Group (SWS) trades at a significant discount to tangible book value, which implies little to no value for the recovering retail brokerage, banking or clearing businesses. The time is right for another takeover offer by Sterne Agee.

Company overview

SWS is the largest full-service brokerage firm headquartered in the Southwestern United States (based on the number of financial advisors).

As of 3/31/13, the full-service brokerage business (retail and institutional brokerage and clearing) accounted for 85% of total revenues and the banking business accounted for 15%.

Source: SEC filings

The four operating segments include:

Institutional brokerage. Provides institutional customers securities lending, investment banking, public finance, fixed income sales and trading, proprietary trading and agency execution services.

Retail...

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