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Piper Jaffray Companies Message Board

  • nasdaqmaniaq2007 nasdaqmaniaq2007 Jun 23, 2008 6:22 PM Flag

    any thoughts on pjc? Looking for honest pros and cons

    this board is pretty weak. I guess my main question is whether or not everyone thinks the bottom is in or near?

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    • This is a cylical industry that is still going down on earnings. The P/E doesn't really mean anything right now just as it doesn't for competitors that are reporting losses. In a market like this the most telling valuation is Price to Book. The tangible book for PJC is around $38 to $39 a share and it should trade in the context of 0.7x to 0.9x which explains the $27 to $36 trading range that it is currently stuck within.

      Piper is very levered to corporate finance (M&A and IPO markets) in select sectors (Healthcare, Consumer, Tech, Finance in that order) and municipal finance. The muni market is holding in well and the company is taking market share. However, the weakness in coporate finance is more than offsetting any strength in munis. The only deals the firm is doing right now are in Europe, in Solar, or in China. In a good market PJC can trade at a premium to tangible book but there isn't a reason to own the stock at $35 or $36 a share in a market like this.

    • why would anyone pay 10 times the growth rate for a stock. usual for most stocks is 1.00 times growth rate. maybe 2.o for a stock with rapidly growing earnings.

      This thing is selling for 5 times a 2X growth rate. Personally I view it as a $3.oo to $5.00 stock.

      I am in the puts until the financials in general and PJC in particular are reasonably priced. At current levels with more bad growth news to come this thing is wildly over valued.

    • up slightly now, good time to start shorting again IMO GL

    • Probably a bounce back up tomorrow early but over all this stock is going down into the teens soon.

    • Would you pay $32 for PJC if its only going to earn about 70 cents in 2008

      Thats a pretty high flying P.E. for a financial stock.

      $32 divided by .76 eps = 42 P/E

      I would be looking for this stock to trade around 12 times 2009s EPS

      12 P.E. time $2.00eps = $24.00

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