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Cowen Inc.: Appears Too Cheap

Apr. 01, 2022 1:21 PM ETThe Toronto-Dominion Bank (TD)11 Comments


  • After two years during which it earned $21.38 a share (non-GAAP), boutique investment bank Cowen Inc.’s (COWN) stock is trading around $27 a share.
  • After being the beneficiary of market conditions - namely significant healthcare and SPAC activity during the pandemic - the firm’s stock is trading at a forward PE multiple of 4.
  • With beefed-up advisory and research efforts transforming Cowen into a more diversified firm, the recent insider buying warranted a closer examination.
  • A full investment analysis follows in the paragraphs below.
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Today, we take an in-depth look at a cheap diversified financial name with some recent insider buying, now that so much of the market is selling at lower entry points than it was to start the year. An analysis

Author's note: I present an update my best small and mid-cap stock ideas that insiders are buying only to subscribers of my exclusive marketplace, The Insiders Forum. Our model portfolio has more than doubled the return of its benchmark, the Russell 2000, since its launch.  To join our community and gain access to our market beating returns, just click on our logo below.

This article was written by

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We are a team of analysts led by Bret Jensen, Chief Investment Strategist at Simplified Asset Management.

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Analyst’s Disclosure: I/we have a beneficial long position in the shares of COWN either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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Comments (11)

Appears to be getting cheaper
Bret Jensen profile picture
@Undervalued_stocks Like most of the market, unfortunately
@Bret Jensen what do you think about the recent price target downgrade to $25 by GS? How can it be beloow book value. Are GS analysts out of their minds while other analysts have $50 range targets.
Bret Jensen profile picture
@Undervalued_stocks Probably just means Goldman is accumulating the shares...that has been their MO/reputation for decades now.
Good job..stupid cheap stock...insider buying and buybacks and moving away from focus on healthcare are the keys
astute pathways profile picture
Very cheap indeed...it got pushed down by book value dropping by almost $3, and revenue dropping by almost 100 million YOY
Seem like huge addition of personnel and how do you pay analyst and strategist and other talking heads ? Do you see one of the bigger guys taking them out ? Think overhead will choke them eventually?
I note that "Marketwatch" shows 15% of the float shorted. Do you have thoughts on that? The buyback amount is I think about 3-4% of the float at a price of 27.
bazooooka profile picture
Might end up in the low twenties short term but does seem like its time to start adding
wrc.99 profile picture
Thank Bret for the write up. Might start a small position and wait on the investor day to add!
Bret Jensen profile picture
@wrc.99 YW. Can also open small position via covered calls. Best
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