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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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 […]
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.
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.
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.
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.
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.
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 […]
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.
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.
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.
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.
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.
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.
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%.
EU Equities Decline on Greece’s Woes in Week Ended May 29
EU equities outperformed other major markets in 2015 due to quantitative easing announced by the European Central Bank, a weaker currency, and rising exports.
MasterCard’s Leverage Is Comfortable for Expansion, Acquisitions
MasterCard (MA) has debt of $3.3 billion with a total balance sheet of $15.9 billion as of March 31, 2016. This compares to $16.2 billion in 4Q15.
Bank of America’s Efficiency Could Improve to 63% in 2017
Bank of America (BAC) has put in place a strong expense control mechanism that has resulted in lower growth in operating expenses compared to revenues.
CSX Intermodal Volumes Increase on Domestic Shipments
CSX’s (CSX) Intermodal division provides an alternative to transporting freight on highways using trucks. It reported revenues of $446 million in 4Q15 compared to $465 million in 4Q14.
Why Alternatives Aren’t Expected to Have Premium Returns
Alternatives expect weak performance in the second quarter of 2016 on weak performance of various asset classes.
Prospect Capital Plans to Raise Capital through Spin-Offs
Prospect Capital (PSEC) is targeting spin-offs in order to raise capital to be redeployed in asset classes yielding higher returns.
Schwab Is Targeting Strong Operating Margins in 2017
Charles Schwab (SCHW) has improved its operating margins on improved interest income, administration fees, asset management fees, and new assets.
KKR Realized Performance, Investment Income Declined in 1Q16
In 1Q16, KKR & Co. (KKR) saw its distributable earnings decline on lower bookings. The company made realized performance income of $99 million compared to $308 million in 1Q15.
Carlyle’s Portfolio Appreciated on These
Carlyle managed 5% appreciation in portfolio valuation in 4Q16 and 12% in fiscal 2016, reflecting an improved YoY performance.
BlackRock has a strong position in the competitive landscape
BlackRock (BLK) became the world’s largest asset management company in 2009 with the acquisition of Barclays Global Investors (BGI).
Prospect’s Valuation Discount Consistent on Lower Originations
Prospect Capital’s (PSEC) stock has fallen ~3% in the past quarter, and it has risen ~11% in the past year. The company is currently trading 7% lower than its 52-week high.
BlackRock Misses 1Q16 Estimates on Declining Global Equities
BlackRock (BLK) reported its 1Q16 earnings on April 14, 2016. The company missed Wall Street analysts’ adjusted EPS estimates of $4.29, posting EPS of $4.25.
Allianz Reports 11% Revenue Growth Backed by Insurance Business
Allianz Group offer property casualty insurance, life and health insurance, and asset management products and services in over 70 countries. The company’s major operations are in Europe.
KKR Achieves Higher Realization on Improved Activity in 2Q16
In 2Q16, KKR & Co. (KKR) saw its distributable earnings surge on exit activity in the private equity space. The company made realized performance income of $310 million compared to $258 million in 2Q15.
US Equities: 4th Consecutive Week of Outflow
US equities were impacted by weak jobs data and slower construction and manufacturing activity. But the energy sector attracted investors.
WisdomTree Trades at a Premium due to High Growth
WisdomTree stock is currently trading at 29x on a one-year forward earnings basis. In comparison, its peers are trading at 16.2x.
Prospect Capital’s Valuations: Fair amid Originations, Leverage
Prospect Capital (PSEC) stock rose 3.0% over the past three months and 20.0% over the past year. The company is currently trading 5.0% below its 52-week high.
Carlyle Group’s Private Equity Portfolio Has Risen in 1Q16
Carlyle’s total carry fund valuations rose by 2% in 4Q15, led by a recovery in the valuations of private equity funds.
Prospect Valuations Fair amid Rising Originations, Strong Yields
Prospect Capital’s (PSEC) stock fell ~7% in fiscal 1Q17 (September quarter) but has risen ~6% in the past 12 months.
EU Equity Valuations Improved on Strong Earnings
The MSCI Europe Index was valued at 14.9x on a one-year forward earnings basis in the week ending July 31, 2015. Valuations rose by 0.71% that week.
KKR Expected to See Subdued Realized and Investment Performance
In 1Q16, KKR & Co. (KKR) saw its distributable earnings decline due to lower bookings. The company had a realized performance income of $99 million.
How Did KKR’s Distributions Look in 4Q16?
KKR & Company (KKR) has managed higher realizations over the past few quarters as reflected in its higher distributions to limited partners or investors.
Why BlackRock has an inorganic strategy for different markets
BlackRock (BLK) is focusing on diversifying its expanding portfolio more through acquisitions and offerings in emerging markets.
Berkshire Hathaway’s Portfolio Built Up Expectations in 2H17
According to its 13F filings, Berkshire Hathaway’s (BRK.B) portfolio value was $162.0 billion in 2Q17 compared to $163.0 billion in the previous quarter.
Carlyle’s Portfolio Could Continue on a Subdued Trajectory in 2Q16
Carlyle’s performance is directly impacted by the global macroeconomic environment as well as financial conditions in and outside of the United States.
What’s Expected for Bank of America’s Global Banking in 2018
Global banking’s key drivers Commercial banks (XLF) will likely see subdued credit offtake in the United States due to interest rate hikes and tax rate cuts allowing for higher operating cash flow. However, economies are buoyant, and interest rates are still lower outside the United States. Banks with global exposure could target higher consumer and commercial loans. Bank […]
State Street’s Asset Position: Still a Concern in 1Q16?
As of the fourth quarter of 2015, State Street (STT) reported average total assets that were 10.6% lower than 4Q14.
Which Bank Could Expand Its Loan Book the Fastest in 2018?
Wells Fargo is following strict underwriting guidelines in an effort to reduce its historical provisions. It’s expected to follow this strategy into 2018.
Will J.P. Morgan’s Investment Banking Continue to Grow in 2017?
J.P. Morgan (JPM) advises corporates on fundraising, strategic transactions across countries, and trading activities under its corporate and investment banking division.
Exploring PSEC’s Online Lending and Structured Credit Investments
Prospect Capital has seen strong growth in originations through its online platform. The company has entered into the online lending business with National Property REIT.
Who Would Bid for American Express?
Wells Fargo seems unlikely to put capital on a falling brand like American Express, unless Warren Buffett has a different perspective and backs a takeover.
Intercontinental Exchange Returned $991 Million to Shareholders
Intercontinental Exchange (ICE) returned $991 million to shareholders in 2015. This was comprised of approximately $331 million in dividends and $660 million in share repurchases.
Why Citigroup Shareholder Payouts Are Now Rising
Citigroup (C) has consistently enhanced payouts for shareholders in recent quarters as its operating performance improves.
Bank of America’s Asset Management Depends on This
BAC was managing ~$2.59 trillion on March 31, 2017, in client balances, which represents a growth of 5% on a YoY basis.
US Equities’ Valuations Decline on Global Data: Week Ending June 5
Currently, US equities (SPY) are trading at 17.7x on a one-year forward earnings basis. Valuations decreased by 0.78% in the week ending June 5, 2015.
Emerging Market Equities See Positive Flows in April
The iShares MSCI Emerging Markets Minimum Volatility ETF (EEMV) and several other emerging-market ETFs attracted positive flows totaling $0.3 billion for the week ended May 1, 2015.
Carlyle Group Reports Strong Operating Performance in 1Q15
Carlyle Group (CG) reported its 1Q15 earnings on April 29. The company managed to beat Wall Street analysts’ EPS estimates of $0.70—its EPS was $0.80.
TD Ameritrade Stock Rises 25% in One Quarter on Assets, Acquisition
TD Ameritrade has seen a weaker performance than other brokerage giants. It posted EPS of $0.35 in fiscal 4Q16, missing analyst estimates of $0.38.
How Prospect Capital Improved Its Yields in a Difficult Market
Prospect Capital has managed to generate above-market yields through disciplined credit selection and a diverse origination approach.
Could TD Ameritrade’s Client Assets Stay at December Levels?
For the institutional channel, TD Ameritrade had its second-best quarter ever in terms of net new client assets but fell year-over-year.
Blackstone Hedge Funds Outperform Relatively, Expand Assets
Hedge funds performed dismally during the third quarter on lower volatility and geopolitical risks. Alternative managers saw valuations fall.
How Monetary Policy, Jackson Hole Could Impact Bank of America
Commercial bankers (XLF) in the United States have benefited from rising net interest margins due to rising rates over the past year and a half.
Why is CSX Getting Revalued by the Market?
CSX’s current PE (price-to-earning) ratio is at 18x, compared to the S&P 500 at 19.1x. Overall, the company is expected to grow by 5% over the next two years.
Why Carlyle Group Lost Premium in Its Valuations
Carlyle Group’s (CG) stock has fallen ~11% over the past six months on falling holdings valuations due to the global slowdown.
CSX’s Increased Operating Efficiency Leads to Improved Margins
CSX’s operating expense declined by 13%, or $301 million, from 4Q14. The decline was mainly due to lower labor, fuel, materials, and other expenses.
BlackRock Rewards with Higher Dividends and Repurchases
BlackRock has repurchased $1.1 billion worth of its own stock over the past four quarters. In 1Q16, the company’s stock repurchases were worth $300 million.
Oil Prices: Have They Impacted Blackstone’s Earnings?
Blackstone offloaded much of its exposure to oil prices in 2013 and 2014. Less than a quarter of the company’s energy exposure is impacted by oil prices.
Analyzing Wells Fargo’s Interest and Non-Interest Income
Commercial banks (XLF) have seen their interest income and margins rise over the past few quarters due to rate hikes.
European Equities Rise on Expectation of Further Stimulus
European equities rose as the ECB’s president hinted at further stimulus for the European economy amid falling commodities and a slowing global economy.
Blackstone Posts Loss in Private Equity Portfolio
In its 3Q15 earnings release on October 15, Blackstone (BX) reported an economic loss of $512.5 million in its private equity portfolio.
How Rate Hikes Could Impact Citigroup in 2018
As the Fed targets higher interest rates, credit offtake could be further dampened, partially offset by the Trump administration’s push for domestic manufacturing.
JPMorgan Chase’s Trading Declines across Offerings in 3Q17
CIB’s expenses fell 3% on a year-over-year basis to ~$4.8 billion, mostly due to lower employee compensation.
Blackstone’s Plans for Real Estate Investments
Blackstone has one of the most innovative real estate funds in the world. Its funds have outperformed compared to other real estate investment companies.
Blackstone’s 2Q15 Earnings Miss Estimates
Blackstone reported its 2Q15 earnings on July 16. The company missed Wall Street analysts’ economic net income (or ENI) estimates of $0.44, with a posted ENI of $0.43.
PSEC Cashes In on Its Controlled and Structured Credit Strategy
Prospect Capital’s (PSEC) controlled investments in fiscal 3Q16 stood at 33.3% of its total portfolio compared to 32.5% in the previous quarter.
E*TRADE’s Daily Average Revenue Trades Are Consolidating
E*TRADE (ETFC) reported DARTs (daily average revenue trades) of $170,000 during the quarter—an increase of 1% from the prior quarter.
Asset Managers to See Growth on Diversified Offerings in 1Q18
The recent fall in stocks globally is expected to put some pressure on asset managers’ (VFH) operating performances in 1Q18.
BlackRock expected to benefit from fixed income ETFs
BlackRock benefited the most from the money in motion due to macro factors. Fixed income ETFs in 4Q14 attracted almost half of the total new funds in 2014.