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Leucadia National (LUK) Renamed as Jefferies Financial Group

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Leucadia National Corporation has been renamed as Jefferies Financial Group Inc. (JEF) effective immediately, after receiving a green signal from its shareholders. Following the name change,Jefferies Financial Group will use the ticker “JEF” for trading purposes on the New York Stock Exchange.

Notably, Leucadia renamed itself as part of its transformation from a holding company with disparate assets to a financial services company. The company also declared a cash dividend of 10 cents per share, payable on Jun 29, 2018, to its shareholders as of record Jun 18, 2018.

Our Take

Leucadiahas to continually maintain and upgrade its computer systems as well as networks to prevent any intrusion and data theft of confidential and sensitive client information. At the same time, the company has to employ risk monitoring techniques such as scenario analysis and stress tests, exposure concentrations, counterparty exposure, leverage, cash capital, and performance analysis for its financial services businesses. All these consume a significant amount of Leucadia’sresources and strain its profitability.

Moreover, the company has a significant exposure to the European market. In the current scenario, when the economy in the region is highly unpredictable, particularly after the Brexit referendum, it becomes difficult for Leucadiato increase revenues and reduce costs. Brexit might further result in higher tariff and non-tariff barriers to trade between the U.K. and the European Union, thus lowering the productivity of the company. In the past six months, this Zacks Rank #5 (Strong Sell) company has lost 8.6% compared with the industry’s decline of 7%.

 

Further, the company has been witnessing some activity on the earnings estimate revision front, reflecting bearish sentiment. For instance, in the past couple of months, the Zacks Consensus Estimate for fiscal 2018 earnings moved south from $1.74 to 84 cents.

Stocks to Consider

Some better-ranked stocks from the same space are United Technologies Corporation , Raven Industries, Inc. and Danaher Corporation (DHR - Free Report) . All these companies carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

United Technologies surpassed estimates in the trailing four quarters, with an average positive earnings surprise of 6.8%.

Raven Industries outpaced estimates twice in the preceding four quarters, with an average earnings surprise of 9.8%.

Danaher exceeded estimates in the trailing four quarters, with an average positive earnings surprise of 4.1%.

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