​Stifel: A Favorite in Financial Services

MoneyShow  |

Stifel Financial (SF), which offers securities-related financial services in the U.S., Canada and Europe, is among our latest value-oriented buy recommendations, explains Roy Ward, editor of Cabot Benjamin Graham Value Investor.

One of the company’s subsidiaries, Stifel Nicolaus, is a full-service retail and institutional brokerage and investment banking firm.

Three other subsidiaries include Thomas Weisel Partners, a growth focused investment banking firm; Century Securities Associates, an independent contractor broker-dealer firm; and Stifel Bank & Trust, a retail and commercial bank.

Stifel Financial was founded back in 1890 and has been headquartered in St. Louis, Missouri during its 127 years of existence.

It has acquired many businesses during its history. In recent years, the company purchased Keefe, Bruyette & Woods in 2013, Sterne Agee in 2015, Barclay’s U.S. Wealth Management division in 2015, and Eaton Partners in 2016.

Stifel recently acquired City Financial for an undisclosed amount. City Financial is an Indiana-based investment bank, specializing in public finance and wealth management.

Stifel reported strong first-quarter results. Revenue climbed 9% and EPS surged 37%. Stifel’s banking revenue surged 26%, and asset management and service fee revenue rose 13%.

Management forecast similar growth during the remainder of 2017. Results could easily exceed management’s forecast if President Trump reduces regulatory oversight and cuts income taxes. Also, rising interest rates could benefit the company.

Stifel shares sell at 16.3 times current EPS, and the company maintains a solid balance sheet. Net current asset value per share (NCAV) is 25.02, and SF’s price to NCAV is 1.83 which indicates SF shares are totally undervalued.

Net current asset value is calculated by subtracting all liabilities from current assets and dividing the result by the number of shares outstanding. I expect SF to rise 43% to my minimum sell price target of $66.93 within two years. Buy at $45.65 or below.

Roy Ward has been chief analyst of the Cabot Benjamin Graham Value Investor since 2003.

Subscribe to Roy Ward's Cabot Benjamin Graham Value Investor here…

About MoneyShow.com: Founded in 1981, MoneyShow is a privately held financial media company headquartered in Sarasota, Florida. As a global network of investing and trading education, MoneyShow presents an extensive agenda of live and online events that attract over 75,000 investors, traders and financial advisors around the world.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer.


Discover: Trending Events

United Nations
Blockchain for Europe
Humanity 2.0
World Economic Forum

Watchlist

Symbol Last Price Change % Change
AAPL

     
AMZN

     
HD

     
JPM

     
IBM

     
BA

     
WMT

     
DIS

     
GOOG

     
XOM

     
BRK.A

     
FB

     
JNJ

     
WFC

     
T

     
NFLX

     
TSLA

     
V

     
UNH

     
PG