Financial stock – Purple Ribbon Project http://purpleribbonproject.com/ Wed, 21 Sep 2022 10:58:11 +0000 en-US hourly 1 https://wordpress.org/?v=5.9.3 https://purpleribbonproject.com/wp-content/uploads/2021/10/icon-12.png Financial stock – Purple Ribbon Project http://purpleribbonproject.com/ 32 32 This financial security leaves the F&O prohibited list on September 21 5 Remaining: complete list https://purpleribbonproject.com/this-financial-security-leaves-the-fo-prohibited-list-on-september-21-5-remaining-complete-list/ Wed, 21 Sep 2022 04:41:34 +0000 https://purpleribbonproject.com/this-financial-security-leaves-the-fo-prohibited-list-on-september-21-5-remaining-complete-list/ By Malvika Gurung Investing.com — One stock was removed from the National Exchange’s futures and options (F&O) ban list on Sept. 21, 2022, bringing the total to five on the list. The stock of real estate financing Indebulls (NS:) Housing finance was omitted from the F&O ban list on Wednesday, while five stocks remain on […]]]>

By Malvika Gurung

Investing.com — One stock was removed from the National Exchange’s futures and options (F&O) ban list on Sept. 21, 2022, bringing the total to five on the list.

The stock of real estate financing Indebulls (NS:) Housing finance was omitted from the F&O ban list on Wednesday, while five stocks remain on the list during today’s session. They understand:

  • private stock lender RBL Bank (NS:),
  • the stock of games and hospitality Delta Corporation (NS:),
  • the tractor manufacturer Escorts (NS:),
  • the stock of the multiplex operator PVR (NS:), and
  • cement producer India Cements (NS:).

All five stocks exceeded 95% of the market-wide position limit (MWPL), which banned them from trading in the futures and options segment during the day, and will continue to remain on the list until their positions fall below 80%.

While on the futures and options ban list, no new F&O positions can be bought or sold for the stocks, otherwise that trader is penalized. Traders with existing positions in this security can unwind their positions.

Additionally, the market-wide position limit is set by the exchanges.

The NSE directs all clients/members to trade derivative contracts of the above securities only to reduce their positions by offsetting positions.

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Tata Group financial shares rally to record high, up 30% in 2 weeks https://purpleribbonproject.com/tata-group-financial-shares-rally-to-record-high-up-30-in-2-weeks/ Tue, 13 Sep 2022 07:43:01 +0000 https://purpleribbonproject.com/tata-group-financial-shares-rally-to-record-high-up-30-in-2-weeks/ Shares of Tata Investment Corporation Ltd jumped in Tuesday’s trading session to a record high of ₹2,096 each by rallying more than 6% intraday on BSE. The stock has been in an uptrend for the past few sessions as it has risen over 30% in the past two weeks. Promoted by Tata Sons, Tata Investment […]]]>

Shares of Tata Investment Corporation Ltd jumped in Tuesday’s trading session to a record high of 2,096 each by rallying more than 6% intraday on BSE. The stock has been in an uptrend for the past few sessions as it has risen over 30% in the past two weeks.

Promoted by Tata Sons, Tata Investment Corporation Limited (TICL) is a Non-Banking Financial Company (NBFC) registered with the Reserve Bank of India (RBI). Previously named The Investment Corporation of India, the company is primarily involved in investing in long-term investments such as stocks and stock-related securities. Tata Group shares are up more than 62% over a one-year period.

For the first quarter ended June 2022 or Q1 FY23, Tata Investment Corporation reported a 66.5% increase in consolidated net profit to 89.7 crores, thanks to higher dividend income. The company had generated a consolidated profit after tax of 59.8 crores in the same quarter of the prior year.

Its total operating revenue during the quarter under review amounted to 102 crore compared to 62 crore in the period a year ago. The company’s dividend income was 74 crore against 41 crore in the corresponding period a year ago.

The Company’s activities consist primarily of investing in long-term investments in equities, debt securities, both listed and unlisted, and equity-related securities of companies across a wide range of industries. The company’s main sources of income consist of dividends, interest and profits on the sale of investments.

TICL co-promoted TATA Asset Management Company Ltd with TATA Sons Ltd. in 1994. TATA Sons owns 68% while TICL owns 32% of TATA AMC Ltd. Tata Asset Management (TAM) is one of India’s premier private sector fund management companies. sector. The principal activity of the company is to act as an investment manager for Tata Mutual Funds. Tata Sons is the principal investment holding company and promoter of Tata companies.

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Ameriprise Financial stock could rise as interest rates climb https://purpleribbonproject.com/ameriprise-financial-stock-could-rise-as-interest-rates-climb/ Fri, 09 Sep 2022 22:40:00 +0000 https://purpleribbonproject.com/ameriprise-financial-stock-could-rise-as-interest-rates-climb/ Text size These reports, excerpted and edited by Barron’s, were recently published by investment and research firms. The reports are a sample of the analysts’ thinking; they should not be considered Barron’s opinions or recommendations. Some of the issuers of the reports have provided, or expect to provide, investment banking or other services to the […]]]>

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Forget SOFI shares! Try this other financial stock instead https://purpleribbonproject.com/forget-sofi-shares-try-this-other-financial-stock-instead/ Fri, 09 Sep 2022 12:34:30 +0000 https://purpleribbonproject.com/forget-sofi-shares-try-this-other-financial-stock-instead/ Shares of SoFi Technologies (SOFI) are down more than 60% since the start of the year. The company announced poor financial results in the second quarter. So, instead of SOFI, we believe it may make sense to invest in fundamentally sound financial stocks Forrester (FORR) with significant upside potential. Continue reading…. shutterstock.com – StockNews Fintech […]]]>

Shares of SoFi Technologies (SOFI) are down more than 60% since the start of the year. The company announced poor financial results in the second quarter. So, instead of SOFI, we believe it may make sense to invest in fundamentally sound financial stocks Forrester (FORR) with significant upside potential. Continue reading….


shutterstock.com – StockNews

Fintech SoFi Technologies, Inc. (SOFI) provides digital financial services. The stock has been losing momentum since the beginning of the year due to a turbulent market environment.

Its price has fallen 36.3% in the past six months and 60.5% since the start of the year to close the last trading session at $6.19. It is currently trading 74.7% below its 52-week high of $24.65, which it reached on November 11, 2021.

The fintech company reported disappointing financial results in the second quarter of fiscal 2022. SOFI’s net loss and loss per share were $95.84 million and $0.12, respectively. Additionally, as of June 30, 2022, its total liabilities were $7.16 billion, compared to $4.48 billion as of December 31, 2021.

Given the company’s weak financial position and growth prospects, SOFI is rated a strong sell in our proprietary rating system.

Therefore, investors should consider profitable financial services stocks Forrester Research, Inc. (FORR) instead of SOFI. With a market capitalization of $760.15 billion, FORR operates internationally as an independent research and advisory services firm. The Company operates through three segments: Research, Consulting and Events.

FORR posted strong results for the second quarter of fiscal 2022 and continued to deliver double-digit contract value growth, with revenue growth of 15% for the period. In addition, the company generated positive cash flow, which allowed it to invest more in marketing, sales and technology.

Given FORR’s strong financial results and confidence in its ability to manage costs, the company reiterated its full-year guidance for adjusted operating margin and EPS. The company now expects an adjusted operating margin of around 11.5% to 12.5% ​​and adjusted earnings per share of $2.25 to $2.35.

The FORR has fallen 7% over the past month to close the last trading session at $40.05. However, Wall Street analysts expect the stock to reach the mid-price target of $65.00 in the near term, which represents a Upside potential of 62.3%.

Here’s what could influence FORR’s performance in the coming months:

Strong finances

During the second quarter of Fiscal 2022 ended June 30, 2022, FORR’s revenue increased 15.2% year-over-year to $148.25 million. The company’s operating profit was $20.70 million, up 58.2% year-on-year. Its profit before income taxes rose 71.6% from the prior year period to $20.27 million.

Additionally, the company’s adjusted net profit was $19.22 million, registering a year-on-year increase of 51.4%. Its adjusted EPS was up 51.5% from its value a year ago at $1.00. As of June 30, its cash, cash equivalents and marketable investments were $122.61 million.

Favorable analyst estimates

Analysts expect FORR’s revenue for fiscal year 2022 (ending December 2022) to be $540.98 million, a 9.4% increase over the reporting period. ‘last year. The current year EPS consensus estimate of $2.30 points to 10.1% year-over-year growth. The company has exceeded consensus revenue estimates in each of the past four quarters.

Additionally, FORR’s revenue for fiscal 2023 is expected to increase 8.1% year-over-year to $584.58 million. Analysts expect EPS for the year to rise 15.9% year-over-year to $2.67.

High profitability

FORR’s trailing 12-month gross profit margin of 58.80% is 102.1% above the industry average of 29.10%. Its leveraged trailing 12-month FCF margin of 12.33% is 246.9% higher than the industry average of 3.55%. And the action is over 12 months ROCE and ROTC of 14.85% and 7.86% are above industry averages of 14.29% and 6.66%, respectively.

Updated assessment

In 12-month PEG terms, the FORR is currently trading at 0.15x, 55.9% below the industry average of 0.33x. The stock’s 12-month EV/Sales multiple of 1.46 is 13.6% below the industry average of 1.69. Likewise, its 12-month price/cash flow of 10.60x compares to the industry average of 15.56x.

POWR ratings are promising

FORR’s overall A rating equates to a Strong Buy in our POWR Rankings system. POWR ratings are calculated by considering 118 separate factors, with each factor weighted to an optimal degree.

Our proprietary scoring system also rates each stock against eight distinct categories. FORR has an A rating for quality, in sync with its industry-leading profitability metrics. Additionally, it has an A rating for growth, in line with impressive revenue and profit growth estimates.

FORR is ranked #1 out of 107 stocks in the Financial Services (Corporate) industry.

Beyond what I said above, we also assigned FORR ratings for Sentiment, Value, Momentum, and Stability. Access all FORR assessments here.

Conclusion

FORR delivered impressive results in terms of revenue and profitability in its last quarter. And analysts are optimistic about the company’s revenue and earnings growth prospects. Additionally, the company reaffirmed its adjusted operating margin and EPS guidance for the full year.

Therefore, FORR appears to be a better investment than SOFI, which is rated F (Strong Sell) in our proprietary rating system.


FORR shares were flat in premarket trading on Friday. Year-to-date, the FORR is down -31.81%, compared to a -15.08% rise in the benchmark S&P 500 over the same period.


About the Author: Mangeet Kaur Bouns

Mangeet’s keen interest in the stock market led her to become an investment researcher and financial journalist. Using its fundamental approach to stock analysis, Mangeet seeks to help retail investors understand the underlying factors before making investment decisions.

After…

The post office Forget SOFI shares! Try this other financial stock instead appeared first on StockNews.com

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Gladstone Capital Stock: High Monthly Dividend Financial Stock (NASDAQ: GLAD) https://purpleribbonproject.com/gladstone-capital-stock-high-monthly-dividend-financial-stock-nasdaq-glad/ Fri, 02 Sep 2022 16:07:00 +0000 https://purpleribbonproject.com/gladstone-capital-stock-high-monthly-dividend-financial-stock-nasdaq-glad/ Galeanu Mihai Thesis We believe that Gladstone Capital (NASDAQ:GLAD) is a great investment for income-oriented investors looking for monthly dividends from a company with stable finances. Gladstone Capital’s current dividend yield is very attractive, and we believe that the company’s diversified portfolio with substantial interest rate risk protection will enable this company to navigate well […]]]>

Galeanu Mihai

Thesis

We believe that Gladstone Capital (NASDAQ:GLAD) is a great investment for income-oriented investors looking for monthly dividends from a company with stable finances. Gladstone Capital’s current dividend yield is very attractive, and we believe that the company’s diversified portfolio with substantial interest rate risk protection will enable this company to navigate well through uncertain economic times. Our thesis centers on the stability and predictability of this income stream, and we believe that investors should only buy these stocks for income rather than capital appreciation.

Company presentation

Gladstone Capital is a business development company (BDC) that lends to middle-market US companies with annual EBITDA between $3 million and $5 million. As of June 30, 2022, the company manages a portfolio valued at $586 million and holds positions in 49 companies from 14 different industries. Year-to-date, Gladstone Capital has posted a total return of -8.83%, with the S&P 500 (SPY) down -14.59% and the Financials Sector ETF (XLF) down – 16.18%. The company declared a monthly dividend of $0.0675 for September and trades at an annualized dividend yield of 8.12%.

Chart
GLAD Year to Date Total Returns (Daily) data by YCharts

Stable monthly dividends

Gladstone Capital has a long history of paying monthly dividends, dating back to late 2003. Since 2010, the company has consistently paid a monthly dividend of $0.07 per share to an annual dividend of $0.84 per share until in 2020. In March 2020, the company reduced the monthly dividend from $0.07 per share to $0.065 due to the pandemic. During the month of March 2022, the company increased the monthly dividend to $0.0675 from $0.065 per share. We believe the recent dividend hike shows that management is once again aiming to bring the dividend back to historic levels. Nonetheless, the track record of stable dividend payments on a monthly payout is impressive. While we would like to see dividend payouts increase, we believe that, based on the risk profile, the steady monthly income stream can be beneficial for investors looking for stable and predictable income.

Diversified portfolio

Gladstone Capital has a well-diversified portfolio that provides protection against interest rate risk and other unsystematic risks that would impact certain industries. The company’s portfolio is well-diversified across 14 industries, with the largest sector (Diversified/Conglomerate Services) accounting for only a quarter of the portfolio. Management also reports that 93% of the loan portfolio is floating rate and indexed to LIBOR. This loan term structure will allow the company to benefit from higher interest income as rates continue to rise. In addition, the Company’s portfolio is comprised primarily of a secured tranche in the debt structure, with senior debt representing 73.9% of the portfolio value, while junior debt representing 14.3 %. In the event of major economic difficulties, we believe that the company’s portfolio will be well protected from a significant deterioration in NAV.

Presentation of Gladstone Capital results

Presentation of Gladstone Capital results

Risk for the thesis

For a financial firm lending capital to middle-market companies in the United States, we believe that the main risk to our income-driven thesis is a deeper recession than expected, which could put many out of business. middle market companies. . If the portfolio companies were to fail, Gladstone would see the value of its assets fall and lose interest income. We have already seen a slight decline in QoQ interest income although we have seen the fair value of the portfolio increase over the same period. Nonetheless, in a deep recession, we believe the ability of the financial services company to remain liquid is the most important factor. Fortunately, Gladstone has strong capital, with $11 million in cash and access to $70 million in line of credit. Given that the value of the portfolio is $586 million, access to liquidity represents approximately 15% of the value of the portfolio, which we believe provides a substantial cushion to offset any significant declines in the portfolio.

Conclusion

Gladstone Capital is an attractive investment for income-oriented investors. We believe the company’s dividend policy can provide predictable returns in times of economic uncertainty. Our thesis centers on the predictability and stability of the dividend, and we believe that the company’s diversified portfolio with floating rate loans and a high concentration of secured debt will protect the net asset value and interest income streams of the society.

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3 reasons to buy US financial stocks (NYSE:AFG) https://purpleribbonproject.com/3-reasons-to-buy-us-financial-stocks-nyseafg/ Thu, 01 Sep 2022 16:09:00 +0000 https://purpleribbonproject.com/3-reasons-to-buy-us-financial-stocks-nyseafg/ lamyai Introduction Insurance companies are a solid business. I found another interesting insurance company that has made a lot of profit in recent years. I’m talking about American Financial (NYSE: AFG). Their earnings growth is well reflected in their share the price. If an investor bought their stocks 20 years ago, they would be sitting […]]]>

lamyai

Introduction

Insurance companies are a solid business. I found another interesting insurance company that has made a lot of profit in recent years. I’m talking about American Financial (NYSE: AFG). Their earnings growth is well reflected in their share the price. If an investor bought their stocks 20 years ago, they would be sitting on a nice annual return of 15.4%. So the question is: are equities still attractive?

Chart
AFG Total Return Level data by YCharts

American Financial thrives when interest rates are higher thanks to its portfolio of bonds and alternative investments. American Financial stock is a buy because:

  1. Earnings per share are expected to increase in the coming years.
  2. The valuation is favourable.
  3. An upcoming share buyback program or special dividend is expected.

About the company

American Financial was founded in 1872 and offers property and casualty insurance products in the United States. American Financial’s products include property and transportation insurance, specialty liability insurance, and specialty financial insurance.

Most of its gross premiums come from Specialty Property & Casualty activities. Its four business segments are doing well.

Property and Casualty Insurance Specialty - AFG Investor Relations

P&C specialty (AFG Investor Relations)

Quarterly results were exceptional

Second quarter results were excellent. The company delivered a base annual return of 21% and recorded double-digit premium growth (11%) over last year.

Financial key figures - AFG Investor Relations

Financial key figures (AFG Investor Relations)

The Property & Casualty combined ratio improved by 2.1% compared to last year. The increase in the combined ratio of goods and transport is the result of higher catastrophic losses and lower favorable development. The Specialty Casualty group improved its combined ratio by 7.8%. The company has good loss and cost control

Combined report

06/30/22

06/30/21

Ownership and Transportation

92.4%

86.6%

Specialized accident

80.1%

87.9%

Specialized financial

78.4%

86.4%

Other specialty

114.6%

103.2%

Combined Ratio – Specialty

85.8%

87.9%

The company raised its full-year 2022 base operating profit forecast to $10.75-$11.75.

Rising interest rates are good for US financiers

American Financial invests its earnings primarily in fixed maturities such as bonds. Around 69% of their investment portfolio is allocated to fixed maturities. Approximately 7% of the portfolio is made up of equities and the rest of the portfolio is considered alternative investments.

Higher interest rates are beneficial for the bond portfolio and the alternative investment portfolio. Newly issued bonds are issued at a higher yield, so the investment income from the bonds is higher. However, bond values ​​decline as interest rates rise further. But that’s not a problem for American Financial because they’re held to maturity.

The alternative investment portfolio largely benefits from higher interest rates. The company expects an overall annual return of 10% to 12% on alternative investments, including a strong performance from multifamily investing. Investments related to collective housing represent approximately 55% of the alternative investment portfolio

Total cash and investments - AFG Investor Relations

Total cash and investments (AFG Investor Relations)

The portfolio of fixed maturities is made up of corporate bonds (17%), which make up the bulk of the bond portfolio. Corporate bonds have a higher yield than much safer US Treasuries, which is good for company profits, but also carries a slightly higher risk. Over 91% of their fixed-maturity portfolio is investment grade (BBB or above), so there’s not much to worry about. The annualized return is 2.99% and the average maturity of the bond is 4 years. Due to the short average maturity of bonds, the company is well positioned for interest rate increases.

Fixed Maturities - AFG Investor Relations

Fixed Maturities (AFG Investor Relations)

Repurchase of shares or expected special dividend

In its second-quarter transcript, American Financial hinted that it might launch a shareholder buyout program or pay a special dividend with the excess cash it has after selling its annuity business. I quote Stephen Craig Lindner:

While all of AFG’s excess capital is available for organic growth and acquisitions, based on the assumptions underlying AFG’s current guidance, we still expect to have $400-500 million of excess capital available. for potential share buybacks or additional special dividends through the end of 2022 while remaining within our most restrictive debt-to-capital ratio.

American Financial’s market capitalization is $11 billion, so the redemption yield (or special dividend yield) will be around 4%. Share buybacks should drive up their stock price. The company pays an ordinary dividend of $2.24, which at the current share price translates to a dividend yield of 1.7%. The company has been paying dividends for over 10 years.

What about its valuation? The PE ratio is currently 11, which is lower than the average PE ratio of the last 10 years (the average PE ratio is 12).

Chart
AFG PE Ratio data by YCharts

The share price is valued below the 10-year average PE ratio, while earnings per share are expected to grow in the coming years. It is a favorable combination. Three analysts estimate that earnings per share will be $12.24 in 2024. EPS multiplied by the average PE ratio of 12 and we arrive at a share price of $146 (up 14% excluding dividends). It’s hard to guess what American Financial will do with its excess capital (special dividend or stock buyback), but keep in mind that the stock price is attractive and earnings should rise. You can expect a good return from this stock.

Conclusion

Founded in 1872, American Financial offers property and casualty insurance. The company offers property and transport insurance, special accident insurance and special financial insurance. These four business segments are doing well. The base annualized return was 21% and premium growth was 11% overall.

American Financial is benefiting greatly from higher interest rates in its fixed and alternative term investment portfolios. Fixed maturities represent approximately 69% of their investment portfolio. Newly issued bonds generate more investment income in a higher interest rate environment. The average maturity of their bonds is only 4 years, which is advantageous for American Financial because they can reinvest at higher rates. The company and analysts have therefore raised their expectations and expect earnings per share growth in the years to come.

The company still has $400 million to $500 million in excess cash after selling its annuity business. This will be paid to the shareholder through a special dividend or a share buyback program. The PE ratio is currently below the 10-year average PE ratio of 12. Analysts expect earnings per share to be $12.24 in 2024, at the average PE ratio, the stock price is expected to be of $146 (a 14% increase excluding dividends). Earnings per share growth, favorable valuation and shareholder friendly management make AFG stock a buy.

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Despite earning $219 million, Liberty Financial stock price plummets https://purpleribbonproject.com/despite-earning-219-million-liberty-financial-stock-price-plummets/ Mon, 29 Aug 2022 07:42:33 +0000 https://purpleribbonproject.com/despite-earning-219-million-liberty-financial-stock-price-plummets/ This morning, when the company reports its FY22 annual results, Liberty Financial Group (ASX:LFG) stock price is slightly lower. Let’s take a look at the report highlights for the company. Shares of the loan company are currently down 0.67% from Friday’s closing price, trading at $4.45 per share. What was reported by Liberty Financial Group?At […]]]>

This morning, when the company reports its FY22 annual results, Liberty Financial Group (ASX:LFG) stock price is slightly lower.

Let’s take a look at the report highlights for the company.

Shares of the loan company are currently down 0.67% from Friday’s closing price, trading at $4.45 per share.

What was reported by Liberty Financial Group?
At $219.3 million, statutory net profit after tax (NPAT) increased 18% year over year (year-on-year).
Overall net income after tax and amortization (NPATA) increased 2% year over year to $231.1 million.
Average financial assets increased 6% year over year to $12.9 billion.
The return on financial assets at 1.7% YoY is consistent.
Liberty Financial posted record profitability, originations (loans approved) and portfolio growth, with a final unencumbered dividend of 28.2 cents per share.

The record date for the unfranked dividend of 28.2 cents per share was June 30 and it will be paid on August 31.

The company’s higher cost-to-revenue ratio reduced profitability. From 21.9% in 2H21 to 23.4% in 2H22, it increased. The addition of new employees, which increased the number of employees from 500 to 524 during the period, was one of the reasons cited by the company for the increase.

What else happened in FY22?
In FY22, Liberty Financial’s balance sheet recorded an increase of $50 million in cash. As a result, its net assets grew to $1.11 billion during the reporting period, up 8.34%. The company adds that its debt is rated investment grade BBB- and describes its balance sheet as “stable”.

Breaking down the company’s operating segments, its residential and secured loans broke origination records, with their totals rising 28% and 66%, respectively. These figures led the company to record a record number of originations as a group, with total growth of 36% year-over-year.

On the risk front, the company says COVID-19 is no longer impacting customers, with the predicted risk of the virus falling to 0.3% in FY22 from 9.7% in FY22. during the year 20. What did management say?
Liberty Financial Group Chief Financial Officer Peter Ridel said:

LFG’s capital and liquidity position remains in a strong position to continue supporting our customers and business partners. LFG established seven new funding vehicles in FY22, raising $5 billion in new liquidity. Liberty Financial Group Chief Executive James Boyle also commented:

We continued to make progress in our mission to provide solutions for freethinkers in need of funding. Generating asset growth while maintaining ROA and ROE is further proof of LFG’s growing and sustainable business value.

Summary of news:

  • Despite earning $219 million, Liberty Financial stock price plummets
  • Check out all the news and articles from the latest business news updates.
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Axos Financial Stock: An Oversized Opportunity (NYSE: AX) https://purpleribbonproject.com/axos-financial-stock-an-oversized-opportunity-nyse-ax/ Sat, 27 Aug 2022 03:55:00 +0000 https://purpleribbonproject.com/axos-financial-stock-an-oversized-opportunity-nyse-ax/ Additional disclosure: Gator Capital Management, LLC prepared this letter. Ultimus LeverPoint Fund Solutions, LLC, our administrator, is responsible for the distribution of this information and not for its content. General Disclaimer By accepting this investment letter, you agree not to disclose the information it contains to any other party. This letter and its contents are […]]]>

Additional disclosure: Gator Capital Management, LLC prepared this letter. Ultimus LeverPoint Fund Solutions, LLC, our administrator, is responsible for the distribution of this information and not for its content.

General Disclaimer

By accepting this investment letter, you agree not to disclose the information it contains to any other party. This letter and its contents are confidential and proprietary information of the Fund, and any reproduction of this information, in whole or in part, without the prior written consent of the Fund is prohibited.

The information in this letter reflects the opinions and projections of Gator Capital Management, LLC (the “General Partner”) and its affiliates as of the date of publication, which are subject to change without notice at any time after publication. date of issue. . All information provided is for informational purposes only and should not be considered investment advice or a recommendation to buy or sell any specific security.

All performance results are based on the net asset value of the Fund. Net performance results are presented net of management fees, brokerage commissions, administrative expenses and the cumulative performance allowance, as indicated, and include the reinvestment of all dividends, interest and capital gains. Performance results represent Fund-level returns and are not an estimate of the actual performance of any specific investor, which may differ materially from such performance depending on many factors.

The market indices shown in this letter have been selected for the purpose of comparing the performance of an investment in the Fund with certain well-known equity benchmark indices. Statistical data for the indices was obtained from Bloomberg and returns are calculated assuming all dividends are reinvested. The indices are not subject to any of the fees or expenses to which the funds are subject and may involve significantly less risk than the Fund. The Fund is not limited to investing in the securities that make up these indices, its performance may or may not be correlated to these indices, and it should not be considered as an approximation of these indices. The S&P 500 Total Return Index is a market capitalization-weighted index of 500 widely held stocks, often used as an indicator of the overall US stock market. The S&P 1500 Financials Index is a market capitalization-weighted index of financial stocks within the S&P 1500 Super Composite Index that we have used as a proxy for the financial sector of the US stock market. An investment cannot be made directly in either index. The Fund is composed of securities which deviate significantly from those of the benchmark indices listed above. Therefore, comparing the results presented to those of these indices may be of limited use.

Statements contained herein that reflect projections or expectations regarding the future financial or economic performance of the Fund are forward-looking statements. These “forward-looking” statements are based on various assumptions, which assumptions may prove to be incorrect. Accordingly, there can be no assurance that such assumptions and statements will accurately predict future events or the actual performance of the Fund. No representation or warranty can be given that the estimates, opinions or assumptions made herein will prove to be correct. All forward-looking projections and statements included herein should be considered speculative and are qualified in their entirety by the information and risks disclosed in the Fund’s private placement memorandum. Actual results for any period may or may not approximate these forward-looking statements. You are advised to consult your own independent tax and business advisors regarding the validity and reasonableness of any factual, accounting and tax assumptions. No representations or warranties of any kind are made by the Fund, the General Partner or any other person or entity as to the future profitability of the Fund or the results of an investment in the Fund. Past performance is not indicative of future results.

The funds described herein are unregistered private investment funds commonly referred to as “hedge funds” (each, a “Private Fund”). Private funds, depending on their investment objectives and strategies, may invest and trade in a variety of different markets, strategies and instruments (including securities, securities and derivatives) and are NOT subject to to the same regulatory requirements as mutual funds, including requirements to provide certain periodic and standardized pricing and valuation information to investors. An investment in a private fund involves substantial risks (which also apply to the underlying private funds, if any, in which a private fund may invest).

Prospective investors should note that:
• A private fund represents a speculative investment and involves a high degree of risk. Investors must have the financial capacity, sophistication/experience and willingness to assume the risks of investing in a private fund. An investor could lose all or a substantial part of his investment.
• An investment in a Private Fund is not suitable for all investors and should be discretionary capital reserved strictly for speculative purposes. Only qualified eligible investors may invest in a Private Fund.
• A Private Fund’s prospectus or offering documents are not reviewed or approved by federal or state regulators and its private equity interests are not federally or state registered.
• An investment in a private fund may be illiquid and there are significant restrictions on the transfer or redemption of interests in a private fund. There is no recognized secondary market for an investor’s interests in a Private Fund and none is expected to develop. Substantial redemptions within a limited timeframe could adversely affect the Private Fund.
• Certain assets in a Private Fund’s portfolio may be illiquid and without readily ascertainable market value. The involvement of the manager/advisor in the evaluation process creates a potential conflict of interest. Cases of mispriced portfolios, due to fraud or negligence, have occurred in the industry.
• A Private Fund may have little or no operating or performance history and may use performance information which may not reflect the actual operations of the Private Fund and should be carefully considered. Investors should not place undue reliance on hypothetical, pro forma or past performance.
• A Private Fund may trade in commodity interest, derivatives and futures, for hedging and speculative purposes, and may execute a substantial portion of transactions in foreign markets, which may involve the risk of loss substantial. The prices of commodities, derivatives and futures can be highly volatile, difficult to predict accurately, involve specialized risks and increase the risk of loss.
• The manager/advisor of a private fund has full trading authority over a private fund. The death or disability of a key person, or their departure, may have a material adverse effect on a Private Fund.
• A Private Fund may use a single manager/advisor or employ a single strategy, which could mean a lack of diversification and higher risk. Alternatively, a Private Fund and its managers/advisers may rely on the expertise and trading experience of third-party managers or advisers, whose identity may not be disclosed to investors, who may trade on a variety of different instruments and markets.
• A Private Fund may involve a complex tax structure, which should be carefully considered, and may involve structures or strategies that may cause delays in sending important financial and tax information to investors.
• The fees and expenses of a private fund, which may be significant regardless of any positive returns, will outweigh the trading profits of that private fund. If a Private Fund’s investments are unsuccessful or insufficiently successful, such payments and expenses may, over time, significantly reduce or deplete the net asset value of the Private Fund.
• A Private Fund and its managers/advisors and their affiliates may be subject to various potential and actual conflicts of interest.
• A Private Fund may employ investment techniques or measures designed to reduce the risk of loss which may not be successful or fully successful.
• A Private Fund may use leverage, including derivatives. Leverage presents specialized risks. The greater the leverage used, the more likely it is that a substantial change in value will occur, up or down.

The above summary is not a complete list of the risks, tax considerations and other important information involved with investing in a private fund and is subject to the fuller information contained in that fund’s offering documents. private, which should be carefully considered before making an investment. .

Oakpoint Solutions, LLC, Member FINRA, SIPC

© Gator Capital Management, LLC

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Financial stock revises record date for 2:3 free share issue. Details inside https://purpleribbonproject.com/financial-stock-revises-record-date-for-23-free-share-issue-details-inside/ Thu, 25 Aug 2022 05:15:31 +0000 https://purpleribbonproject.com/financial-stock-revises-record-date-for-23-free-share-issue-details-inside/ Escorp Asset Management has revised its record date to September 5, from September 3, 2022 for the free share issue it announced at a 2:3 ratio. Free shares are additional fully paid shares issued by a company to its existing shareholders. “The purpose of this letter is to inform you that the company has set […]]]>

Escorp Asset Management has revised its record date to September 5, from September 3, 2022 for the free share issue it announced at a 2:3 ratio. Free shares are additional fully paid shares issued by a company to its existing shareholders.

“The purpose of this letter is to inform you that the company has set Monday, September 05, 2022 as the record date for the purposes of establishing the eligibility of shareholders for the issue of free shares in the proportion of 2:3*, i.e. 2 (two) Fully Paid Capital Shares for every 3 (three) Existing Fully Paid Capital Shares held, subject to shareholder approval at the Annual General Meeting (AGM) to be held on Friday August 26 2022,” the company advised in an exchange filing Wednesday.

Last month, the company said that “we hereby inform you that the board of directors, at its meeting held today, i.e. July 30, 2022, has, among other things, considered and approved the following: 1. Approved rectification of free share issue in the ratio of 2:3* i.e. 2 new fully paid equity shares for every 3 existing fully paid equity shares held by shareholders replacing the previous resolution passed by shareholders by mail vote on July 14, 2022, subject to shareholder approval at the 11th AGM.”

The company said the bonus issue is created from the free reserves available as of March 31, 2022. “The capital released before the bonus issue is 6,67,00,000 consisting of 66,70,000 Participating Shares of 10 each and the paid-up capital after the bonus issue will be up to Rs. 11,11,66,660 consisting of 66,70,000 existing equity shares plus bonus shares up to 44,46,666 equity shares of 10 each,” he added. The company added that the estimated date when these free shares would be credited/sent: September 21, 2022.

Based in Mumbai, India, Escorp Asset Management offers portfolio management, personal finance advisory, institutional asset management and research services. The company is a subsidiary of Aryaman Financial Services Limited, which is the flagship company of the Aryaman Group. Aryaman Group is a financial services player with interests in merchant banking, investment banking, corporate advisory, equity brokerage, market making and equity investments.

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Ally Financial Stock: See the forest for the trees (NYSE: ALLY) https://purpleribbonproject.com/ally-financial-stock-see-the-forest-for-the-trees-nyse-ally/ Mon, 22 Aug 2022 04:36:00 +0000 https://purpleribbonproject.com/ally-financial-stock-see-the-forest-for-the-trees-nyse-ally/ Adam Smigielski Allied Financial (NYSE: ALLY) is over 100 years old, with its roots in the auto finance industry. The company began life in 1919 as General Motors Acceptance Corporation (GMAC) as a captive automobile lender to General Motors. Its original purpose was to support sales at the car manufacturer. It’s an important backdrop to […]]]>

Adam Smigielski

Allied Financial (NYSE: ALLY) is over 100 years old, with its roots in the auto finance industry. The company began life in 1919 as General Motors Acceptance Corporation (GMAC) as a captive automobile lender to General Motors. Its original purpose was to support sales at the car manufacturer.

It’s an important backdrop to understanding how Ally has become the nation’s largest auto lender today, offering retail auto loans and leases and dealer loans for inventory and expansion.

But the bank has spent the past few years diversifying its product portfolio among home loans, insurance, credit cards and commercial loans, both organically and through acquisition. Ally has also created depository and investment franchises.

Fig. 1.

Expanding product portfolio

Expanding product portfolio (Ally 2021 results presentation)

And these “other” areas of banking are growing rapidly.

New products attract new customers and create cross-selling opportunities that broaden and strengthen the customer relationship with the bank.

Diversified credit growth results in reduced credit risk. And Ally’s growing retail deposit franchise has reduced the bank’s funding costs. All of this translates into sustained improvements in net interest margins (NIM) and capital ratios.

But the market ignores this structural development and its long-term benefit.

Stocks came under pressure on heightened concerns about consumer credit and rising deposit costs. The sell side downgraded the company, refusing to see beyond a year or two.

This myopic view offers long-term investors an attractive opportunity. Ally, selling at near-tangible book value with a target ROTCE of 16-18% (2Q22 ROE was 23%), is a bargain. Even more so if the consumer remains resilient and a shallow recession occurs.

Understand the structural movements that the market is ignoring

From a near-permanent start, Ally has grown its broader credit portfolio nearly 6x since 2014. Figure 2 shows that auto-related credit accounted for 72% of Ally’s loan and lease portfolio in 2014, but that in 2021, it had fallen to 58%.

Figure 2

Diversification of the credit portfolio

Diversification of the credit portfolio (Ally 2021 results presentation)

New customers increased by 52% between 2014 and 2021, mainly due to these new product offerings. While margins have widened thanks to new higher yielding products such as point-of-sale financing and credit cards.

Both products have average interest rates that are much higher than the bank’s other products. In 2Q22, Ally said point-of-sale financing had a rate of 11.94%, while credit cards were at 19.71%. Personal auto loans, the company’s largest credit category, were just 6.82%.

This simple rate comparison obviously does not take credit costs into account. But the key point is that diversification into these high-yielding products will drive NIMs higher.

Speaking of net interest margins, liability management has also driven improvements for Ally. In Figure 3, we can see that NIMs increased from 2.54% in 2014 to 3.56% by 2021. At the end of 2Q22, net interest margin was 4.06% after adjusting for the base OID.

The key to the company’s success? Cheap deposits.

Figure 3

Net interest margins (NIM), cost of funds and deposit profile

Net interest margins (NIM), cost of funds and deposit profile (Ally 2021 results presentation)

Figure 3 shows how Ally has significantly changed its liability profile from what was once just 41% of deposits supported to 89% by 2021. This has resulted in the cost of funds dropping to 1, 2% in 2021, compared to 2.0% in 2014.

My guess is that Ally’s all-digital banking brand will also create lasting advantages over other banks that investors should pay attention to.

As shown in Figure 4, the marketing efforts attracted a younger millennial customer who was more comfortable with online banking.

Figure 4

Evolution of the profile of retail deposits

Evolution of the profile of retail deposits (Ally 2021 results presentation)

Ally is also able to deliver efficiency ratios that surpass other banks. In 2021, Ally reported an adjusted efficiency ratio of 43.7% (excluding insurance operations), well below its past three-year average of 48.4%.

In comparison, monetary central banks such as Bank of America and JP Morgan had average ratios of 63.9% and 57.3%, respectively. While banks of comparable asset size had efficiency ratios of 57%.

The cost advantages that digital-only banks have allow them to offer higher deposit rates than physical banks without affecting overall profitability.

Interestingly, investors were paying for fintechs such as Lending Club and Sofi when they launched plans to access low-cost deposits and offer all digital services. A strategy Ally has been running for years.

Strong capital returns

These structural moves allowed Ally to free up excess capital, and CEO Jeffrey Brown didn’t hesitate to return those dollars to shareholders.

In the last CCAR exercise, Ally saw its Stress Capital Buffer (SCB) requirement reduced by 100 basis points to 2.5% compared to 2020. A testament to the bank’s strategy which has both reduced risk credit through product and customer diversification and improved margins by using low cost deposits.

These improvements allowed management to reduce its outstanding shares by 35% between 2Q22 and 2Q16, while significantly increasing the dividend by more than 3x.

At $1.2 per year, Ally is yielding 3.42% at its current price, above the KBW Index by 2.72% and the S&P 500 by 1.69%.

Fig 5.

Return on Allied Capital

Return on Allied Capital (Presentation of 2Q22 results)

Credit costs a worry, but fears may be exaggerated

It’s hard to know how deep the recession will be in the US with such a plethora of issues in mind: Covid, Ukraine-Russia, inflation, interest rates.

A deep recession would increase credit costs and slow asset growth for all banks.

But investors should recognize that the banking industry facing these challenges is very different from the one that survived 2008.

Regulatory capital has been bolstered, loan losses are pre-recognized through the Current Expected Credit Loss (CECL) framework and balance sheets have never looked better. Meanwhile, employment remains robust and wages are rising – generally a boon for consumer banks like Ally.

Credit conditions have also normalized due to improving credit trends, the net result of government stimulus measures providing consumers with pandemic support. A relevant graph for Ally’s consumer exposure is Figure 6.

The S&P/Experian Consumer Credit Default Index shows that although defaults increased to 0.53%, they are still well below the 10-year average. So we still have a bit of a way to go before investors start panicking about credit costs.

Figure 6

S&P/Experian Consumer Credit Default Index

S&P/Experian Consumer Credit Default Index (S&P/Experian)

Still, there is no doubt that charges at Ally have increased, particularly in Retail Auto, as seen in Figure 7. The bank saw $153 million in loans written off its reserves in 2Q22. That’s up 5 million USD reserve release to the comparable period last year.

Most of the write-offs were for $108 million retail auto loans. And all of the company’s major credit metrics, such as 30+ Days Past Due (DPD) and 60+ DPD, are up.

Picture 7

Asset Quality Update

Asset Quality Update (Presentation of 2Q22 results)

But there are reasons to be confident that Ally’s primarily consumer portfolio will be resilient.

The bank’s auto credit portfolio, its main credit product, focuses primarily on prime credit customers. For example, the book value of non-senior consumer auto loans before accounting for loan loss provisions (ALL) was approximately 11.0% of total consumer auto loans, or approximately $9 billion at 2T22.

Personal auto loan loss reserves are now more than double what they were in the middle of 2019, when interest rates were around that level. Ally’s ALL as a percentage of its automotive retail portfolio was 3.51% at the end of 2Q22, compared to 1.48% at the end of 2Q19. The majority of these additional reserves came from the bank adopting CECL accounting in early 2020.

And net charges and more than 30 DPD defaults are still lower than the comparable period in 2019, despite Ally’s reserves ramping up.

In sum

Ally shares are undervalued at nearly $35. This is only 1.10x the adjusted tangible book value of $32.2. If you need more convincing, you can take comfort in the fact that Berkshire Hathaway recently bought Ally shares at an average price of $43.48: link. Then dramatically increased its position to 9.7% of the bank as prices fell during the second quarter.

The main concern, of course, is whether the consumer will withstand the blistering attacks of inflation and higher interest rates. As costs rise to levels not seen in over a decade, will this also deteriorate Ally’s consumer portfolio, book value and earning potential?

The answer is yes – but not in the long term.

Ally’s structural moves will create lasting benefits for shareholders. Let’s just look at the company’s “flywheel”. As a digital bank, Ally has a cost base that allows it to compete aggressively for deposits. He can use these low-cost funds to build a diversified credit portfolio, which has plenty of room for high-margin growth.

Diversified banking and credit offerings attract long-term customer relationships. These relationships sign new credit products with higher interest margins and asset management products that generate fee income that further diversifies and strengthens the bank’s revenue stream.

Ally is still in the early stages of this diversified growth, but the benefits are beginning to flow through its dividends and stock buybacks. And regulators seem to agree when they lowered the bank’s SCB requirement.

Shareholders who see beyond this cyclical low and understand the bank’s flywheel will be rewarded over the long term by a diversified consumer bank with attractive growth prospects, improving margins and a strong balance sheet.

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