Investing

Jefferies Top Value Stocks to Buy May Be the Best Ideas for Q4

LPL Financial

This brokerage firm has been the destination of choice for many financial professionals that have left bulge bracket companies. LPL Financial Holdings Inc. (NASDAQ: LPLA) serves independent financial advisors and financial institutions, providing them with the technology, research, clearing and compliance services, and practice management programs they need to create and grow their practices.

The company provides objective financial guidance to millions of American families seeking wealth management, retirement planning, financial planning and asset management solutions.

Jefferies recently initiated coverage on the firm and said this in the research report:

LPL has two significant opportunities in 1) the $5 trillion fee-based advisory segment (they only have about 2% share presently) and 2) the $4 trillion independent employee channel. Management is also looking to broaden its capabilities across the entire $20 trillion advice-driven wealth management spectrum, build scale through tech/services and develop new revenue streams. While interest rates are likely a near term headwind, the higher-fee advisory business is one of the fastest growing segments within the franchise with ~8% organic growth. In addition, LPL currently trades at 11x forward EPS, a 5x discount to its historical P/E and the group average.

Investors receive a 1.2% dividend. The $96 Jefferies price objective is near the $95.33 consensus figure. The stock closed most recently at $ 84.47.

SVB Financial

This boutique financial services firm may be off many investors’ radar screens. SVB Financial Group (NASDAQ: SIVB) is a financial holding company that serves companies in the technology, life science, venture capital, private equity and premium wine industries, offering diversified financial services such as commercial, investment, international and private banking. Headquartered in Santa Clara, California, the company operates through offices in the United States and international operations in China, India, Israel and the United Kingdom.

The analysts are very positive on the company’s positioning, and noted this after meeting with the bank last week:

Mgmt expressed confidence in the revenue outlook owing to robust organic growth prospects and healthy exit markets (exit markets better than the headlines suggest). That said, they also acknowledged that lower rates/Fed cuts are likely to mitigate topline growth and squeeze profitability. Despite the more challenging yield environment, management has continued to move forward with the deposit strategy. In addition, we believe the company is considering implementing a dividend given their strong capital position.

Jefferies has set a whopping $263 price target. The consensus target is $257.11, and shares closed at $215.57.

These four top stocks offer investors with a longer time horizon solid value and outstanding entry points. All make good sense for investors looking to leave pricier growth companies.