Why the Downgrade?
Shares of National Grid have dipped roughly 6.3% since the company reported its fiscal year 2013 (ended Mar 31 2013) results on May 16. Adjusted net earnings, in local currency, increased roughly 12% year over year on the back of 4% increase in revenue.
Talking of expenses/income, increase of 3% in operating costs, 4% decline in financial income and 20% increase in tax expense restricted bottom-line growth. To add to this peril, long-term borrowings at the end of 2013 represented a year-over-year increase of 20%. Net cash flow generated from operating activities dipped 11% year over year.
In the last 60 days, the Zacks Consensus Estimate for National Grid has gone down by 6.1% to $4.00 for fiscal year 2014 and declined 10.3% to $4.26 for fiscal year 2015. Also, we have an Earnings ESP (Read: Zacks Earnings ESP: A Better Method) of -1.0% and -2.1% for fiscal years 2014 and 2015, respectively.
Best Financial Companies To Buy For 2014: Old Mutual(OML.L)
Old Mutual plc operates as a long-term savings, protection, and investment company. The company provides investment management and life assurance-based solutions, which address protection and retirement savings needs; and banking, short-term insurance, and asset management solutions in Europe, the Americas, Africa, and Asia. It offers life assurance, pensions, and investment products to individuals, businesses, corporates, and institutions. The company also offers investment banking solutions to institutional and corporate clients; corporate banking services, including commercial, industrial, retail, and residential property finance solutions to retail and corporates markets; commercial banking solutions to small to medium-sized businesses; and transactional, card, lending, and investment products and services to individuals and small businesses. In addition, it provides short-term insurance products, including property, accident, motor, engineering, marine, and crop insur ance to customers ranging from small businesses to large corporations; protection, fire policies, accident policies, and motor fleet insurance to corporate clients ranging from mid-size companies to large multi-nationals; domestic household, motor, and all risk short-term insurance products to domestic customers; and alternative risk transfer products primarily to medium-sized commercial customers. Further, the company provides investment management solutions to institutional and individual investors. It offers its products and services directly, as well as through financial advisers. Old Mutual plc was founded in 1845 and is based in London, the United Kingdom.
Best Financial Companies To Buy For 2014: EverBank Financial Corp (EVER.N)
EverBank Financial Corp, incorporated in 2004, is an unitary savings and loan holding company. The Company provides a range of financial products and services directly to customers through multiple business channels. Its operating subsidiary is EverBank. As of December 31, 2011, EverBank had $ 10.3 billion deposits. EverBank offers a range of banking, lending and investing products to consumers and businesses. EverBank provides services to customers through Websites, over the phone, through the mail and at 14 Florida-based Financial Centers. The Company operates in two operating business segments: Banking and Wealth Management, and Mortgage Banking. Its Banking and Wealth Management segment includes earnings generated by and activities related to deposit and investment products and services and portfolio lending and leasing activities. Its Mortgage Banking segment consists of activities related to the origination and servicing of residential mortgage loans. In April 201 2, the Company acquired MetLife Bank�� warehouse finance business. In October 2012, it acquired Business Property Lending, Inc.
Asset Origination and Fee Income Businesses
The Company has a range of asset origination and fee income businesses. The Company generates generate fee income from its mortgage banking activities, which consist of originating and servicing one-to-four family residential mortgage loans. It originates prime residential mortgage loans using a centrally controlled underwriting, processing and fulfillment infrastructure through financial intermediaries (including community banks, credit unions, mortgage bankers and brokers), consumer direct channels and financial centers. Its mortgage origination activities include originating, underwriting, closing, warehousing and selling to investors prime conforming and jumbo residential mortgage loans. From its mortgage origination activities, it earns fee-based income on fees charged to b orrowers and other noninterest income from gains on sales ! fr! om mortgage loans and servicing rights. During the year ended December 31, 2011, it originated six billion dollars of residential loans. It generates mortgage servicing business through the retention of servicing from its origination activities, acquisition of bulk mortgage servicing rights (MSR) and related servicing activities.
The Company�� mortgage servicing business includes collecting loan payments, remitting principal and interest payments to investors, managing escrow funds for the payment of mortgage-related expenses, such as taxes and insurance, responding to customer inquiries, counseling delinquent mortgagors, supervising foreclosures and liquidations of foreclosure properties and otherwise administering its mortgage loan servicing portfolio. It earns mortgage servicing fees and other ancillary fee-based income in connection with these activities. It services a portfolio by both product and investor, including agency and private pools of mortgages secured by properties throughout the United States. As of December 31, 2011, its mortgage servicing business, which services mortgage loans for itself and others, managed loan servicing administrative functions for loans with unpaid principal balance (UPB) of $54.8 billion.
The Company originates originate equipment leases nationwide through relationships with approximately 280 equipment vendors with networks of creditworthy borrowers and provide asset-backed loan facilities to other leasing companies. Its equipment leases and loans finance essential-use health care, office product, technology and other equipment. Its commercial financings range from approximately $25,000 to $1.0 million per transaction, with typical lease terms ranging from 36 to 60 months. Its commercial finance activities provide it with access to approximately 25,000 small business customers nationwide, which creates opportunities to cross-sell its deposit, lending and wealth management pro ducts. It focuses to offer warehouse loans, which are s! hort-! te! rm revo! lving facilities, primarily securitized by agency and government collateral. It provides financial advisory, planning, brokerage, trust and other wealth management services to its mass-affluent and high-net-worth customers through its registered broker dealer and recently-formed registered investment advisor subsidiaries.
Interest-Earning Asset Portfolio
As of December 31, 2011, the Company�� interest-earning assets were $11.7 billion. As of December 31, 2011, its loan and lease held for investment portfolio was $6.5 billion. As of December 31, 2011, the carrying values of its interest-earning assets are: residential, government-insured (residential), securities, commercial and commercial real estate, Bank of Florida (covered), lease financing receivables, and other.
Residential includes primarily prime loans originated and retained from its mortgage banking activities, acquired from third parties or held for sale to other investors. government-insured (residential) includes Government National Mortgage Association (GNMA) pool buyouts with government insurance, sourced from its mortgage banking segment and third-party sources. Securities include non-agency residential mortgage-backed securities (MBS) and collateralized mortgage obligation (CMO) purchased at significant discounts. This portfolio includes protection against credit losses from purchase discounts, subordination in the securities structures and borrower equity. Commercial and commercial real estate includes a range of commercial loans, including owner-occupied commercial real estate, commercial investment property and small business commercial loans. As of December 31, 2011, Bank of Florida (Covered) includes commercial, multi-family and commercial real estate loans with $71.3 million of purchase discounts. Lease financing receivables include covered lease financing receivables. As of December 31, 2011, the lease portfolio had $64.7 million of total discounts. Other includes home equity loan! s and lin! ! es of cre! dit, consumer and credit card loans and other investments.
Deposit Generation
As of December 31, 2011, the Company had approximately $10.3 billion in deposits. Its market-based deposit products, consisting of its WorldCurrency, MarketSafe and EverBank Metals Select products, provide investment capabilities for customers seeking portfolio diversification with respect to foreign currencies, commodities and other indices. Its financial portal includes online bill-pay, account aggregation, direct deposit, single sign-on for all customer accounts and other features. Its Website and mobile device applications provide information on its product offerings, financial tools and calculators, newsletters, financial reporting services and other applications for customers to interact with it and manages all of their EverBank accounts on a single integrated platform. Its new mobile applications allow customers using iPhone, iPad, Android and Blackberry devices to view account balances, conduct real time balance transfers between EverBank accounts, administer billpay, review account activity detail and remotely deposit checks.
The Company generates deposit customer relationships through its consumer direct, financial center and financial intermediary distribution channels. Its consumer direct channel includes Internet, e-mail, telephone and mobile device access to product and customer support offerings. Its direct distribution with a network of 14 financial centers in Florida metropolitan areas, include Jacksonville, Naples, Ft. Myers, Miami, Ft. Lauderdale, Tampa Bay and Clearwater. As of December 31, 2011, its financial centers had average deposits of $130.5 million, which is approximately double the industry average. In addition, it generates noninterest-bearing escrow deposits from its mortgage servicing business.
5 Best Penny Stocks To Own For 2014: National Penn Bancshares Inc.(NPBC)
National Penn Bancshares, Inc. operates as the bank holding company for National Penn Bank that provides commercial banking products and services to residents and businesses primarily in eastern and central Pennsylvania. It offers various deposit products, including demand, NOW, money market, and other checking and savings accounts, as well as certificates of deposit. The company also provides consumer loan products, such as installment loans, home equity loans, residential mortgage loans, multi-family loans, educational loans, and credit cards; commercial loans, including short-term loans for seasonal and working capital purposes, term loans secured by real estate and other assets, loans for construction and expansion needs, and revolving credit facilities; and commercial real estate lending services, including loans to developers of residential and commercial projects. In addition, it offers automated teller services; safe deposit and night depository facilities; Interne t banking services, including online bill paying services; remote deposit capture, disbursement, and collection; and private banking services. Further, the company provides investment management and fiduciary services to individuals, corporations, government entities, and non-profit institutions; investment and consulting solutions to the retirement plan market; securities brokerage services; property and casualty insurance services to individuals and businesses; employee benefits consulting services; and equipment leasing services. At March 31, 2011, it operated through 123 offices, including 122 community banking offices in Pennsylvania; and 1 office in Maryland. The company was founded in 1874 and is headquartered in Boyertown, Pennsylvania.
Best Financial Companies To Buy For 2014: Anchor Bancorp(ANCB)
Anchor Bancorp operates as the bank holding company for Anchor Bank that provides various banking products and services in western Washington. It generates deposit products comprising checking accounts, money market deposit accounts, savings accounts, and certificates of deposit. The company offers a range of loan products consisting of one- to four-family residential real estate loans, real estate construction loans, land acquisition and development loans, commercial real estate loans, multi-family real estate loans, commercial business loans, and consumer loans. As of June 30, 2011, it had 1 administrative office, 14 full service banking offices, and 1 loan center. Anchor Bancorp was incorporated in 2008 and is based in Lacey, Washington.
Best Financial Companies To Buy For 2014: Provident New York Bancorp(PBNY)
Provident New York Bancorp operates as the bank holding company for Provident Bank that provides commercial, community business, and retail banking products and services to businesses, individuals, and municipalities in New York and New Jersey. It offers various deposit products, such as savings accounts, NOW accounts, checking accounts, money market accounts, club accounts, certificates of deposit, commercial checking accounts, IRAs, and other qualified plan accounts. The company?s loan portfolio includes commercial real estate, commercial business, and one-to four-family real estate loans; acquisition, development, and construction loans; and consumer loans, including homeowner, home equity lines of credit, new and used automobile loans, and personal unsecured loans, such as fixed-rate installment loans and variable lines of credit. In addition, it provides services, including cash management, sweep accounts, insurance agency, investment advisory, asset and investment m anagement, and Internet banking services. As of September 30, 2011, Provident New York Bancorp operated 30 retail branches and 7 commercial banking centers in the Hudson Valley region. The company was formerly known as Provident Bancorp, Inc. and changed its name to Provident New York Bancorp in June 2005. Provident New York Bancorp was founded in 1888 and is headquartered in Montebello, New York.
Advisors' Opinion:- [By Jon C. Ogg]
The M&T Bank Corp. (NYSE: MTB) and Hudson City Bancorp Inc. (NASDAQ: HCBK) transaction is the only pending deal of 2012 vintage due to various regulatory concerns. MTB currently has 9% short interest outstanding and PACW 15%. Another merger covered is the deal between Provident New York Bancorp (NASDAQ: PBNY) and Sterling Bancorp (NYSE: STL), and the balance are simply too small for us to warrant effort.
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