In this article, we discuss the top 5 stock picks of Steve Leonard’s Pacifica Capital Investments. If you want our detailed analysis of these stocks, go directly to the Top 10 Stock Picks of Steve Leonard’s Pacifica Capital Investments.
5. Jefferies Financial Group Inc. (NYSE:JEF)
Pacifica Capital Investments’ Stake Value: $29,370,000
Percentage of Pacifica Capital Investments’ 13F Portfolio: 9.49%
Number of Hedge Fund Holders: 37
Jefferies Financial Group Inc. (NYSE:JEF) is a New York-based financial services company that specializes in investment banking, institutional brokerage, securities research, mergers and acquisitions, corporate restructuring, and asset management. Steve Leonard, via Pacifica Capital Investments, holds a $29.3 million stake in Jefferies Financial Group Inc. (NYSE:JEF) as of the third quarter, which accounts for 9.49% of the firm’s investment portfolio.
As of Q3 2021, 37 hedge funds in the database of Insider Monkey were bullish on Jefferies Financial Group Inc. (NYSE:JEF), with a stake value of $684 million. This is compared to 29 hedge funds in the preceding quarter, owning stakes valued at $698 million. The leading stakeholder in Jefferies Financial Group Inc. (NYSE:JEF) is Robert Rodriguez and Steven Romick’s First Pacific Advisors LLC, with 6.79 million shares worth over $252 million.
Jefferies Financial Group Inc. (NYSE:JEF) posted its Q3 results on September 30. EPS in the period came in at $1.50, beating estimates by $0.50. The Q3 revenue equaled $1.94 billion, exceeding estimates by $196.25 million.
On November 16, Keefe Bruyette analyst Michael Brown downgraded Jefferies Financial Group Inc. (NYSE:JEF) to Market Perform from Outperform with a price target of $46, citing the stock’s valuation as the reason for the downgrade.
Here is what GoodHaven Funds has to say about Jefferies Financial Group Inc. (NYSE:JEF) in its Q2 2021 investor letter:
“Jefferies Financial was our next biggest dollar gainer in the period, yet also remains undervalued in our opinion. We are running out of accolades to describe the string of great results at Jefferies. In their just reported six-month period, the core business earned over 35% return on tangible equity (ROTE) and more than doubled pre-tax income versus the prior year’s six months. Book value and tangible book value/share are now $40.77 and $30.29 respectively. Students of capital allocation should study Rich Handler. Over the last three years, Jefferies has repurchased 123 million shares for $2.6 billion at an average price of $21.04/share. Astute repurchases materially benefit remaining owners. While it’s reasonable to expect some normalization of Jefferies recent great results, Jefferies has gained market share in its core business and has a culture adept at finding new niches to earn good returns, while helping clients, and when existing niches become less profitable. Even if a more normalized ROTE is in store, we think that level will be materially higher than it has been in the recent past.”
