Jefferies Financial Group Inc. (JEF) Leaves Investors Bruised, But Is It Still Worth Buying?

On October 07, 2019, Jefferies Financial Group Inc. (NYSE:JEF) shares lost -5.87% or -1.08 points to close at $17.32 with a heavy trading volume of 4.144 million shares. It opened the trading session at $18.25, the shares rose to $18.3 and dropped to $17.29, the range by which the price of stock traded the whole day. The company now has a market cap of $5.08 billion and currently has 293.16 million outstanding shares. Jefferies Financial Group Inc. (JEF) stock has plunged -3.18 percent of market value in 21 trading days.

JEF stock’s trailing 3-year beta is 1.46, meaning there will be a greater rate of return, although posing a higher risk. The part of a firm’s profit given to each outstanding share of regular stock was $3.76 share in the trailing 52 weeks. The stock’s value surged 6.58 percent year to date (YTD) compared to a decline of -19.31 percent in 52 week’s period. The firm’s shares are still trading -19.97 percent below its 1-year high of $21.64 and 14.22 percent up from 52-week low of $15.16. The average consensus ranking on the company is 2, on a ranging where 5 is equal to a consensus sell rating. In other words, the mean analyst recommendations are ranking this stock as a buy.

Investors will get the next hint of JEF’s Q4 earnings on February 28. Analysts are predicting revenue to suffer decline of -51.3 percent to $1B in the financial fourth quarter, while EPS will soar by about -51.79 percent to $0.27 per share. In the last quarter, it earnings of $2.14 per share came better than the $0.275, adjusted, expected by Thomson Reuters consensus estimate. Revenue for the quarter was $806.59M, missing the $971.4M analysts had expected. Earnings are seen to rise by 123.9 percent this year, -47.96 percent in the coming year and the trend continues by 18 percent every year in the next 5 years.

Let’s take a glimpse at some insider activity at Jefferies Financial Group Inc. (NYSE:JEF) and observe the pattern. The earliest insider trade happened on 01/25/2013. Broadbent Peregrine C parted with a total of 90 thousand shares of the firm at average share price of $19.55. The total amount for the sale was set at $1.76 million. On completing this exchange, the EVP and CFO account balance was 39.44 thousand shares. The stock lost -5.88 percent from that insider sale. On 06/20/2012, O Kane Michael T, Director, did a purchase of 5 thousand shares at a price of $13.28 per share. This increased 66.4 thousand shares to the insider’s fortune and the stock experienced a 38.55 percent rally in price since the news became public. This exchange saw 39.26 thousand shares get into the Director account.

On 04/08/2011, Director STEINBERG JOSEPH S recorded a purchase transaction valued at $125 million. The purchase at $24.25 a share has added 5.15 million shares into the insider’s portfolio position. Meanwhile, shares price witnessed -24.12 percent decrease since the transaction reporting date. The company insider is left with 0 thousand shares remaining in the account. LEUCADIA NATIONAL CORP, who works as 10% Owner at the company, performed a purchase of 5.15 million shares in a transaction worth $125 million. The acquisition recorded on 04/08/2011 was priced at $24.25 per share. The stock price plunged -24.12 percent since the transaction. LEUCADIA NATIONAL CORP currently holds a stake of 0 thousand in JEF stock which is worth $0 thousand after the insider buying.

The stock is lingering around the initial support level of $16.97. After this, the following support is at the zone of $16.63. Up until the time the JEF stock hit levels beyond the current one, bulls should have no alarm. In terms of its momentum, the stock’s RSI hit 38.56 on the daily chart, and this may be a cause for comfort. In case the price goes below $16.63 level on closing basis, there may be more profit booking with the stock growing weaker. Still, getting to the $17.98 level may cause a pull-back move approaching $18.65 mark.

Jefferies Financial Group Inc. (JEF) shares are trading at a P/E ratio of 33.5 times earnings posted in the trailing 12 months. The industry JEF deals with has an average P/E of 15.3. Its P/B ratio is standing at 0.5X compared to the 1.3 industry average. It is additionally sporting a 1.7 on the Price-to-Sales ratio, compared to the industry’s P/S average of 2.5. Jefferies Financial Group Inc. has a 59.4% gross profit margin, with its operating margin around 0%. Alongside this, the company’s net profit margin currently stands at 0%.