67 WALL STREET, New York - April 1, 2013 - The Wall Street Transcript has just published its Investment Banks and Asset Management Report offering a timely review of the sector to serious investors and industry executives. This special feature contains expert industry commentary through in-depth interviews with public company CEOs, Equity Analysts and Money Managers. The full issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.
Topics covered: Consistent BDC Dividend Yield - Private Middle Market Funding - Decreased Bank Loan Competition - Exchanges Trading Volumes and Cash Flow
Companies include: Goldman Sachs Group Inc. (GS), Morgan Stanley (MS), Charles Schwab Corp. (SCHW), TD AMERITRADE Holding Corporat (AMTD), IntercontinentalExchange, Inc. (ICE), CME Group Inc. (CME), State Street Corp. (STT), The Bank of New York Mellon Co (BK), Northern Trust Corporation (NTRS), BlackRock, Inc. (BLK), Invesco Ltd. (IVZ), T. Rowe Price Group, Inc. (TROW), CME Group Inc. (CME), Franklin Resources Inc. (BEN)
In the following excerpt from the Investment Banks and Asset Management Report, the former CEO of Lehman Brothers and a 10 year career as a senior executive at Morgan Stanley discusses his outlook for the investment sector stocks for investors. Mr. Hintz is also an Institutional Investor number one ranked analyst.
TWST: Please begin with a brief overview of your coverage, including some of the specific names you follow.
Mr. Hintz: Thank you. Our group covers the securities industry; Goldman Sachs (GS) and Morgan Stanley (MS), Charles Schwab (SCHW), Ameritrade (AMTD) and LPL (LPLA). I cover the exchanges, ICE (ICE) and CME (CME); the custodian banks, State Street (STT), Bank of New York Mellon (BK), Northern Trust Corporation (NTRS); and the asset managers, Franklin Templeton (FTF), BlackRock (BLK), Invesco (IVZ) and T. Rowe Price (TROW).
TWST: You have broad coverage. Where do you see the greatest level of investor interest at the moment and, in your view, in which of those four segments do you want to be buying right now?
Mr. Hintz: It is not quite as straightforward as that. These sectors are correlated, but they are not perfectly correlated. The earnings performance of each of these sectors increases at certain points of the economic cycle. The equity market anticipates these earnings changes and the stocks move somewhat ahead of the cycle, but they are not synchronous.
Wall Street's fixed income business performs best in periods of declining rates and narrowing credit spreads - so a weak economy and the monetary response of central banks support performance. Narrowing credit spreads eventually drive a sharp increase in debt underwriting.
In an early-stage economic recovery, there is typically a recovery of equity underwriting and the mergers and acquisitions activity of the Street. These are among the highest margin businesses of the securities firms with pretax margins above 35%. Statistically, M&A activity is correlated with GDP. Equity underwriting tends to be correlated with solid corporate earnings...
For more of this interview and many others visit the Wall Street Transcript - a unique service for investors and industry researchers - providing fresh commentary and insight through verbatim interviews with CEOs, portfolio managers and research analysts. This special issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.