More From Robert Karr
AXP’s Valuations Down in 4Q15, Targeted $1 Billion in Savings
American Express (AXP) expects its full-year 2016 EPS to be between $5.40–$5.70. It looks to return to positive EPS growth in 2016 and is targeting a minimum of $5.60 EPS for 2017.
TD Ameritrade’s Valuation Falls alongside the Industry
Historically, TD Ameritrade traded at a discount to its peers because of average operating margins. The sector’s valuations fell in the recent past.
Blackstone Is Attracting New Capital
The launch of innovative ideas at the right time can help Blackstone attract a good amount of new capital through its dedicated network.
Prospect Capital’s Selection Is Key to Risk Return Profile
Prospect Capital (PSEC) announced on May 6 that it has completed one new investment and several follow-on investments totaling $219 million in 3Q15, which ended on March 31, 2015.
Prospect Capital Yields Stabilize in Difficult 3Q15
Prospect Capital has managed to generate above-market yields through disciplined credit selection and a diverse origination approach.
Morgan Stanley Investment Management Thrives in 2Q15
Morgan Stanley’s (MS) Investment Management segment reported a 7% increase, bringing total revenues to $751 billion compared to $705 billion in 2Q14.
What to Expect of Blackstone’s Private Equity Performance in 4Q16
In 3Q16, Blackstone’s PE division posted economic income of $132.1 million against total revenues of $337 million.
The Carlyle Group’s Major Risks in Managing Funds
The Carlyle Group (CG) generates its revenues from managing and generating returns on its funds. The higher the funds and returns, the more revenue the company generates.
BlackRock’s Retail Clientele to See Subdued Fund Flows in 1Q17
BlackRock’s retail business has seen negative flows over the past few quarters. Retail investors have withdrawn funds from the alternatives, fixed income, and multiasset categories.
Fund Flows Continue to Rise in the European Union
Fund flows in European equities (EFA) have expanded at a slower pace since 2011. Overall, they’ve grown at an average of 10% over the past three years.
Prospect Capital: Could Yields Stabilize or Rise in 2018?
Prospect Capital (PSEC) has experienced yield compression in recent quarters, largely due to its efforts to reduce risk and focus on quality credit.
Wall Street’s Expectations for US Bankers in Q3 2018
Broader markets have risen in the past few months on corporate earnings and slower rate hike expectations due to the Trump administration’s criticism of the Fed’s hawkish policy.
Berkshire Takes a Hit on Insurance and BNSF Performance in 1Q16
Berkshire Hathaway missed its operating EPS analyst estimate of $2,609 and reported $2,275, mainly due to its Insurance and BNSF segments.
Valuations of Emerging Market Equities Were Flat Last Week
Emerging market equities are currently trading at 11.5x on a one-year forward earning basis.
BlackRock’s Diversified Offerings Can Benefit from Rate Hikes
In the first quarter, BlackRock managed ~$1.9 trillion in fixed income offerings, up from ~$1.6 trillion in the first quarter of 2017.
What to Expect of Bank of America’s 1Q18 Earnings
Bank of America (BAC) is expected to post earnings per share or EPS of $0.59 in 1Q18, marking growth of 43.9%.
AIG Returned $2.6 Billion to Shareholders in 3Q16
AIG declared its quarterly dividend of $0.32 per share in 3Q16 totaling ~$338 million, translating into an annualized dividend yield of 2.2%.
T. Rowe Stock Rose, New Assets Are a Concern
T. Rowe (TROW) stock rose 8% over the past three months mainly due to a strong operating performance in 3Q16.
Carlyle’s Realizations and Distributions Expected to Improve in 3Q
Carlyle Group (CG) is expected to see its distributable income rise in the current quarter on monetizations through the IPO process, private sales, and placements.
Inside Berkshire’s Investment Income and Valuations after 3Q17
As of October 2017, Berkshire Hathaway (BRK.B) stock has returned 3.2% in the past month and 31.4% over the past four quarters.
Blackstone, Carlyle, and KKR Saw Real Estate Growth in 3Q16
The real estate space has seen a relatively strong performance when compared to other asset classes.
Morgan Stanley’s Strong Revenue Model
Morgan Stanley charges fixed fees and performance fees for asset management services, products and services, and administration of accounts.
BlackRock’s Retail Continues to Attract New Clients across Classes
BlackRock’s (BLK) retail business had assets under management (or AUM) of $542 billion as of March 31, 2016.
What Berkshire’s Major Portfolio Changes Indicate
According to its 13F filings, Berkshire Hathaway’s portfolio value stood at $162 billion on June 30, 2017, representing a marginal decline from $163 billion in 1Q17.
Why Blackstone’s Q2 Performance Beat Estimates
The Blackstone Group (BX) reported its second quarter earnings on July 21. The company beat Wall Street analysts’ economic net income estimates of $0.39.
European Equities – Strong Performance in 2015
Major ETFs tracking European equities—like the WisdomTree International Hedged Equity Fund (HEDJ)—also generated good returns for investors.
AMG Generated Solid Results in 2Q despite Market Volatility
On August 1, Affiliated Managers Group (AMG) reported net 2Q16 profits of $107.4 million—compared to $128.7 million for 2Q15.
Prospect Capital: Impact of Macro Policy Decisions, Reforms
Prospect Capital (PSEC) is registered as a business development company (or BDC), which means that if it pays 90% of its profits in dividends, it won’t have to pay any taxes.
Why Carlyle’s 4Q16 Performance Nosedived
Carlyle Group posted economic net income of $0.02 in 4Q16 on February 8, which was lower than the analyst estimate of $0.41.
Balance Sheet, Slippages to Determine Bank of America’s Lending
The Fed has suggested four rate hikes in 2018, reflecting a strong stance on economic growth and inflationary pressures.
Mergers and Marketing Efforts Pressure MasterCard’s Margins
MasterCard’s rebates and incentives rose by 18% to $1.0 billion in 1Q16—higher than expected, mainly due to the timing of some deals and acquisitions.
Emerging Market Equities See Valuations Rise on Fundamentals
Valuations rose by 3.10% in the week ended September 11, 2015. The rise was mainly due to buying in India’s equities on higher industrial production and low inflation.
Why Emerging Market Equities Attract Higher Capital Flows
Emerging markets attracted overall positive cash flows for the week ending April 2, 2015. Investments witnessed increased allocation by 7% over the past three years.
How Will Carlyle Group Perform in 3Q16?
Carlyle expects EPS of $0.44 in 3Q16. For the full year, analysts have revised earnings expectations up to $1.44 with an implied price-to-earnings of 10.8x.
BlackRock Garners More than $5 Trillion in AUM, Beating Estimates
BlackRock, the world’s largest asset manager, beat Wall Street analysts’ adjusted EPS estimates of $4.98, posting EPS of $5.14 for 3Q16.
Macros Impact Bankers’ Asset Management
Higher valuations and the expectation of faster rate hikes led to withdrawals from equities and debt securities in recent quarters.
PNC Financial Services: What Impacted Its 2Q16 Earnings?
PNC Financial Services (PNC) reported its 2Q16 earnings on July 15, 2016, and managed to beat analysts’ estimates.
What Caused Affiliated Managers’ Valuation to Fall?
Asset managers reported lower profitability for the third quarter of 2015, resulting in falling prices. In turn, this led to lower valuations.
Weaker Markets Continue to Affect Carlyle’s Realizations
Carlyle Group (CG) reported distributable earnings of $129 million in fiscal 1Q16, 13% lower than in 1Q15.
Prospect Capital’s Distributable Income Beat Its Payouts
Prospect Capital generated distributable income of $94.0 million or $0.26 per weighted average share, exceeding $0.25 per share of dividends.
What KKR’s Buyback Program Could Mean for the Future
KKR announced a $500 million share buyback program in 4Q15, buying back $270 million units and the remainder during the March quarter.
KKR Saw Declining Valuations in 3Q15
Returns to shareholders KKR & Co. L.P. (KKR) reported an economic net loss of $286 million for the third quarter of 2015. The company’s earnings decreased on a decline in the value of its holdings due to a market rout in 3Q15. KKR’s distributable earnings declined to $349 million, or $0.35 per unit, in 3Q15. The […]
US Equities Fall on Global Sell-Off Last Week
The US equities market (SPY) fell 3.40% during the week ended September 4, 2015. The fall was due mainly to a global sell-off in equities on concerns of a slowdown in China.
Schwab’s Banking Operation Has More Assets, High Interest Income
Charles Schwab’s (SCHW) banking operations have seen strong growth over the past few quarters on accumulation of assets, expanding balance sheet, and interest income.
Emerging Market Equities Saw Valuations Fall on Commodity Prices
Emerging market equities are trading at 10.5x on a one-year forward earnings basis. Valuations fell by 0.97% in the week ending August 14.
How the Macroenvironment and Interest Rates Could Impact Berkshire
Berkshire Hathaway (BRK.B) has been delivering a stable operating performance on high market valuations and the improving economy.
Affiliated Managers Beat Estimates on Investment Performance
On November 9, Affiliated Managers Group reported net 3Q15 profits of $109 million compared to $103.2 million in the third quarter of 2014.
Visa Expected to Post Healthy Margins in Fiscal 3Q16
Visa (V) has maintained its operating margin above 60% over the past few years. The company’s major expenses include personnel, marketing, network and processing, and professional fees.
Is KKR a good pick for retirement or growth options?
Is KKR a good pick for growth options? KKR is expected to improve its realizations in 2015 and 2016 after an expected valuation increase of energy holdings.
Morgan Stanley Posts Highest Profit Since 2007 in 1Q15
Morgan Stanley (MS) reported net income of $1.18 billion, or $1.18 per diluted share, the bank’s most profitable first quarter since the 2007 financial crisis.
KKR Stock Rises on Strong Operating Performance in 3Q
KKR & Company has seen a recovery after substantial losses in 1Q16. In 3Q16, it posted EPS of $0.71, beating Wall Street analyst estimates of $0.65.
Why Alternative Asset Managers Rebounded in 2016
Alternative asset managers such as Blackstone Group (BX), KKR (KKR), and Carlyle Group (CG) have rebounded sharply over the past three months.
Prospect Capital’s 1Q17 Results Fall on Lower Deployments
Prospect Capital (PSEC) reported fiscal 1Q17 EPS of $0.22—lower than the analyst estimates of $0.24. PSEC saw lower earnings on lower investment income.
Ares Capital Continues to Expand Its Second Lien Exposure
Over the past few quarters, Ares Capital (ARCC) has consistently increased its exposure to second lien senior secured debt.
Affiliated Managers Is Doing This to Stabilize Revenues
Affiliated Managers Group (AMG) is expected to post revenues of $567 million in the September quarter. That’s higher than the June quarter but a 7.5% decline YoY.
US Equities Continue to See Outflows on Global Growth
In the week ended September 4, 2015, US equities saw total outflows of $1.6 billion compared to $1.4 billion the previous week. The rate rose due to investors pulling out funds on slowing global growth.
US Equities Witness Net Inflows for 2015
US equities witnessed outflows from the equities in the last few weeks. For the week ending April 2, 2014, US equities saw outflows of $3 billion.
Wall Street Still Loves Banking Stocks
Wall Street analysts have upgraded their ratings for bankers over the past couple of years.
US Equities Decline on 1Q15 Gross Domestic Product Numbers
US equities declined in 1Q15. GDP dropped by 0.7% in the first quarter against the expectation of 0.2% growth.
Ares Capital’s First Lien Investing Rises in 2Q16
Looking at Ares Capital’s first lien investing, we see that first lien senior secured loans represented 29% in 2Q16, which was in line with the previous quarter.
BlackRock Increases Dividend on Improved Operating Performance
BlackRock has historically paid out the major portion of its profits in dividends. It increases its dividend per share in-line with its performance.
Global and US Recession: Hyped, or a High-Probability Scenario?
US gross domestic product (or GDP) expanded by 0.7% in 4Q15, indicating sluggish growth and the impact of the global slowdown scenario.
Why Citigroup Might Surprise Investors in 1Q18 and 2018
In this series, we’ll look at Citigroup’s expected performance in 2018, segment-wise performance, valuation, dividends, and repurchases.
Blackstone’s Performance Stands Out among Managers in 4Q16
The Blackstone Group (BX), the world’s largest alternative asset manager, posted an economic net income (or ENI) of $0.68 in 4Q16, higher than analysts’ estimate of $0.64.
Berkshire’s Energy Business Rises on Rates and Utilities in 3Q
BHE’s earnings before taxes rose to $1,246 million in 3Q16 as compared to $1,153 million during the same quarter last year.
How Were Ares Capital’s Credit Statistics?
Ares Capital’s credit statistics improved as nonaccrual loans declined from the first quarter at 1.3% of the firm’s portfolio at cost from 2.6% at the end of 2015.
Blackstone and KKR Raise Funds amid Volatility and Prospects
Equities and broader markets rebounded in 2H16. The global economic outlook has now become relatively more stable for 2017.
Increased Spending, Electronic Payments Beneficial for Visa
Visa’s total transactions grew by 11% on a YoY (year-over-year) basis in fiscal 4Q15. The company reported total transactions of 27.9 billion in fiscal 4Q15, as compared to 25 billion in fiscal 4Q14.
Bank of America’s Continued Efficiency Maintains Margins
Operating margins In 3Q17, Bank of America’s (BAC) non-interest expenses fell sequentially and YoY (year-over-year), reflecting strong operating efficiency. This fall was partially offset by continued investments in technology. The bank’s expenses fell to $13.1 billion in 3Q17, compared with $13.5 billion in 3Q16 and $13.7 billion in 2Q17. Commercial banks (XLF) are focusing on reducing operating spending, targeting huge investments in technology […]
Warren Buffett Leads with Value-Based Investing Principles
Warren Buffet has restricted himself to his circle of competencies. He has only invested in the businesses he has understood.
CSX Stock Rises on Record 2Q15 Earnings
CSX reported its second quarter earnings on July 14. The company beat the Wall Street analysts’ EPS estimates of $0.52, posting earnings per share of $0.56.
Why Closed-End Funds Are Not That Enthusiastic about Rate Changes
Prospect Capital (PSEC) is strengthening its capital position in order to take advantage of mispricing during volatile times.
Why JPMorgan and Wells Fargo Are Trading at High Multiples
In spite of a rather weak performance, Wells Fargo (WFC) commands the highest premium due to its strong franchise, mortgage concentration, and high net interest margins.
MasterCard’s Performance to Be Driven by Investments, Expansions
MasterCard (MA) is expected to release its 1Q17 earnings on April 27, 2017. Its EPS is expected to be $0.94, a 9.3% rise year-over-year.
Unchanged Interest Rate Impacts US Equities Valuations
Valuations rose 0.03% in the week ended September 18, 2015. They were revised mainly due to higher retail sales, more building permits, lower unemployment rate, and unchanged interest rates.
CME Continues to Trade at a Premium on Interest Rates, Energy
CME stock has been historically valued at a premium compared to its peers. The company commands a premium, mainly due to higher volumes in interest rates, foreign exchange, and energy trades.
BlackRock’s Retail Saw Outflows on US and Europe Equities in 3Q16
BlackRock’s (BLK) Retail business had assets under management of $554 billion as of September 30, 2016, which made up 12% of the company’s total AUM.
What Could Drive JPMorgan Chase’s Growth in 1Q18?
JPMorgan Chase (JPM) is expected to post a strong operating performance in 1Q18 due to growth in core banking, investment banking, and trading activity.
Interest Rate Expectations Have Jolted Equity and Debt Alike
Asset managers (VFH) are seeking stability in order to attract funds toward either equity or debt offerings.
Blackstone’s Real Estate Growth in Europe and Asia in 2017
The Blackstone Group (BX) garnered realizations of $3.5 billion in 4Q16, reflecting a year-over-year rise in improved valuations.
EU Equities See Outflows on Lower Industrial Production
In the week ending September 11, EU equities (EFA) saw total outflows of $309 million—compared to inflows of $1 billion in the previous week.
Why Wall Street Is Neutral on Goldman Sachs despite High Growth
Goldman Sachs (GS) has demonstrated a strong performance in the first half of 2018 as compared to a weaker 2017 mainly due to higher trading income, private market equity returns, debt lending, and transaction advisory fees.
Do US Bankers’ Asset Management Divisions Have Room for Growth in 2018?
Commercial banks and asset managers have had a strong run since the beginning of 2016, given the rise in equities across the board.
BlackRock’s Valuations following the Decline in Global Equities
BlackRock (BLK) stock has risen 27.6% over the past six months and 39.0% over the past year.
Berkshire Hathaway’s BHE Benefits from Power Stations in 2Q16
BHE’s earnings before taxes rose to $666 million in 2Q16, as compared to $649 million during the same quarter last year.
Berkshire’s Portfolio and Valuation Rebound in Second Quarter
Berkshire Hathaway (BRK.B) stock has fallen 2.0% in the last month and risen 15.3% in the last year.
Why Ares Capital Is Deploying Higher Leverage
Ares Capital’s (ARCC) net DE (debt-to-equity) ratio increased to 0.79x as of December 31, 2015, above the 0.65x–0.75x target set by the management.
JPMorgan Chase’s Shareholder Payouts Rise on Strong Buybacks
In 4Q17, JPMorgan Chase (JPM) returned $6.7 billion to shareholders in the form of dividends and repurchases, compared to $4.5 billion in 3Q17.
What Can We Expect from PNC Financial Services in 2Q16?
PNC Financial Services (PNC) is expected to report EPS (earnings per share) of $1.76 in the June quarter and $7.16 for fiscal 2016.
Trade Wars: Higher Volatility and Trading Income
Volatility in equity and debt markets has risen substantially since February due to shifting investments in alternatives and other asset classes.
How Payment Processors Are Performing amid Challenges in 2016
Payment processors are seeing major changes in 2016, including increased competition on pricing and the adoption of new technologies such as wearables.
Citigroup Can Target $15 Billion in Shareholder Payouts in 2018
In 2018, Citigroup can target $15.0 billion–$18.0 billion in total payouts, depending on whether it can meet its earnings outlook.
Emerging Market Equities Saw Outflow in Week Ending August 14
China’s devaluation of its currency, combined with a steep decline in Russia’s GDP, led investors to withdraw funds from these emerging markets.
Which Payment Processor Has the Highest Payouts and Repurchases?
Payment processors are rewarding their shareholders with 1%–2% dividend yields, largely dependent on operating performance.
AIG’s Shareholder Payouts Rise on Higher Investment Income
In 1Q17, AIG repurchased ~56.0 million shares, or 5.5% of its total outstanding shares, for a purchase price of ~$3.6 billion. The company made additional repurchases of ~$1.1 billion through May 3, 2017.
How Rate Hikes and Tax Rate Cuts Could Play Out for Bankers
The Fed is targeting one last rate hike in December 2017 to bring the federal funds rate from 1.25% to 1.50%.
BlackRock Bests Estimates on Earnings, Misses on Revenue in 1Q17
BlackRock (BLK), the world’s largest asset manager, reported its 1Q17 earnings on April 19, 2017. The company beat Wall Street analysts’ adjusted EPS (earnings per share) estimate of $4.89.
Retail Flows Continue to Weaken for BlackRock’s Offerings
BlackRock’s (BLK) Retail business had assets under management (or AUM) of $564 billion on March 31, 2017. Its retail AUM made up 11% of its total AUM.
Berkshire’s Payouts Are Expected to Remain Weak
Stringent conditions for payouts Berkshire Hathaway (BRK.B) is sitting on a cash pile of $100 billion. Whereas the company had long kept a policy of no dividends, repurchases, or stock splits, Buffett and Munger altered their strategies to accommodate repurchases for the first time in 2011. Shareholders expect the company to either invest existing liquidity or return rewards […]
AIG’s Stock Benefits from De-Risking of Balance Sheet
During the first quarter of 2015, AIG (AIG) took further actions to simplify its balance sheet and reduce risk.