The entire U.S. financial sector has been clipped significantly over the last two months. Some stocks have been punished unfairly and will turn out to be great long term bargains. One of these bargains is Jefferies Group (JEF).
According to Yahoo Finance:
Jefferies Group, Inc., together with its subsidiaries, operates as a securities and investment banking company in the Americas, Europe, and Asia. It operates in two segments, Capital Markets and Asset Management.
Below are six reasons to find value in JEF at under $15 a share:
- JEF is selling at the bottom of its five year valuation range based on P/E, P/S, P/B and P/CF.
- Insiders made significant purchases when the stock was in the 20’s and there has been no insider selling over the previous six months.
- Jefferies sells at less than 10 times this year’s projected earnings and around 8.5 times 2012’s consensus EPS.
- JEF has a decent dividend yield of 2% and a five year projected PEG of just .72. Revenue growth will be north of 35% this year and should be around 10% in 2012.
- Jefferies opportunistic picking up of Bear Stearns and Lehman personnel and business should pay dividends for years to come as it develops into a bigger player in its space. Its debt underwriting revenues doubled from the second quarter of 2010 to the second quarter of 2011.
- S&P has a price target of $24 a share on Jefferies. Ticonderoga has a $23 target on JEF.
Disclosure: I have no positions in any stocks mentioned, but may initiate a long position in JEF over the next 72 hours.