Jefferies Story

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JEF -- USA Stock  

USD 32.71  0.17  0.52%

Considering the 90-day investment horizon Jefferies Financial is expected to generate 2.61 times more return on investment than the market. However, the company is 2.61 times more volatile than its market benchmark. It trades about 0.16 of its potential returns per unit of risk. The DOW is currently generating roughly 0.19 per unit of risk. While some of us are excited about financial services space, it makes sense to digest Jefferies Financial in greater detail to make a better estimate of its risk and reward. We will discuss if the expected returns on Jefferies Financial will justify its current volatility.
Published over a week ago
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Is Jefferies Financial (NYSE:JEF) a good hedge for your existing portfolios?
Jefferies Financial Group has roughly 1.94 B in cash with 2.08 B of positive cash flow from operations. This results in cash-per-share (CPS) ratio of 7.78.
Volatility is a rate at which the price of Jefferies Financial or any other equity instrument increases or decreases for a given set of returns. It is measured by calculating the standard deviation of the annualized returns over a given period of time and shows the range to which the price of Jefferies Financial may increase or decrease. In other words, similar to Jefferies's beta indicator, it measures the risk of Jefferies Financial and helps estimate the fluctuations that may happen in a short period of time. So if prices of Jefferies Financial fluctuate rapidly in a short time span, it is termed to have high volatility, and if it swings slowly in a more extended period, it is understood to have low volatility.
Please read more on our technical analysis page.

How important is Jefferies Financial's Liquidity

Jefferies Financial financial leverage refers to using borrowed capital as a funding source to finance Jefferies Financial Group ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. Jefferies Financial financial leverage is typically calculated by taking the company's all interest-bearing debt and dividing it by total capital. So the higher the debt-to-capital ratio (i.e., financial leverage), the riskier the company. Please check the breakdown between Jefferies Financial's total debt and its cash.

How Jefferies utilizes its cash?

To perform a cash flow analysis of Jefferies Financial, investors first need to understand how to read the cash flow statement. A cash flow statement shows the amount of cash Jefferies Financial is receiving and how much cash it distributes out in a given period. The Jefferies Financial cash flow statement breaks down these inflows and outflows into different buckets, including operating activities, investing activities, and financing activities.
Jefferies Financial Net Cash Flow from Operations is projected to increase significantly based on the last few years of reporting. The past year's Net Cash Flow from Operations was at 788.29 Million

Jefferies Financial Volatility Drivers

Jefferies Financial unsystematic risk is unique to Jefferies Financial and usually not directly affected by the market or economic environment. An example of unsystematic risk is the possibility of poor earnings or a layoff due to coronavirus. One may mitigate nonsystematic risk by buying different securities in the same industry or by buying in different sectors. For example, if you have a position in Jefferies Financial you can also buy Loews Corp. You can also mitigate this risk by investing in the financial conglomerates sector as well as in companies having nothing to do with it. This type of risk is also called diversifiable risk and can be understood from analyzing Jefferies Financial important indicators over time. Here we run a correlation analysis between relevant fundamental ratios over at least ten year period to find a relationship in the way they react to changes in Jefferies Financial income statement and balance sheet. Here are more details about Jefferies volatility.
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