Jefferies Jumps After Q4 Results
Middle market investment bank Jefferies Group (NYSE: JEF) released its fiscal fourth-quarter earnings results on Tuesday prior to the opening bell. In early trading, the stock was up about two percent to $18.43 after gapping higher at the open.
The investment bank reported earnings for the quarter of $72 million or $0.31 per share, compared to $48 million or $0.21 per share, in the year ago period.
On a non-GAAP basis, net earnings were $81 million or $0.35 per share. This beat analysts' consensus earnings per share estimates of $0.32.
Net revenue in the period was $769 million versus $554 million last year. This also came in well ahead of analysts' consensus revenue estimates for the fourth quarter of $722.56 million.
Over the last three months, Jefferies shares have moved sharply higher, recording a gain of 17.50 percent amid a rally in financial stocks. On Tuesday, the financial sector recorded a gain of 0.25 percent, and over the last 90 days, the Financial Select Sector SPDR ETF (NYSE: SPY) climbed roughly two percent, outpacing the S&P 500 by nearly 400 basis points.
The gains have been coming in large banks such as Citigroup (NYSE: C) and Bank of America (NYSE: BAC). The former stock has added almost 15 percent over three months, while the latter is up over 20 percent. These two stocks in particular are extremely liquid and are among the favored vehicles for large hedge funds to gain exposure to the financial sector.
Perceived higher-quality competitors JP Morgan (NYSE: JPM) and Wells Fargo (NYSE: WFC) have not been able to keep pace with Citi and Bank of America. Over the last 90 days, JPM has added only around five percent while Wells Fargo is actually down 2.50 percent.
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