Mergers and Acquisitions: Investment Banking Revenue
By Ann Sosnowski
Taipan Group's Dynamic Market Alert
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Little-Known Company Scorches Competition With "Legal Monopoly,"
Could Hand Investors an 80% Gain in Seven Months
Find out what you must do now to maximize your gains. PLUS: Learn how the biggest boom in mergers and acquisitions in seven years could make you fantastic riches in new "synergy stocks."
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Mergers and Acquisitions: Investment Banking Revenue
by Ann Sosnowski, Editor, Diligent Investor
If you want to measure the current strength of the M&A market, look no further than investment banks' earnings.
Case in point, Lehman Brothers Holdings Inc. (LEH:NYSE) announced a 27% increase in second-quarter net income.
Most important of all, and what I was looking for in the earnings release, was its success outside of the capital markets, specifically in investment banking and advisory revenue. And Lehman didn't disappoint: LEH announced double-digit growth in both.
Lehman's investment-banking revenue rose a whopping 55% to $1.2 billion from the same a year before. Even more shocking, investment banking grew 35% from the first quarter of 2007, proving that the 2007 M&A boom is alive and well. Additionally, the company's advisory revenue jumped 14% to $277 million.
Lehman's CFO also announced that the company's backlog of fees and deals for mergers is near record levels! And it reiterated its forecasts of 10% to 15% growth industry-wide for equity deals and twice that, at 30%, for mergers and acquisitions! Mergers & Acquisitions: No Sign of Slowing Down
Cowen Group Inc. (COWN:NASDAQ), the boutique investment banking company that we're currently holding in Diligent Investor to diversify our M&A portfolio, had voiced optimism about the M&A boom for 2007 as well when it announced earnings in early May. COWN's chairman and CEO, Kim Fennebresque, said that the company has extreme promise due to a "build in its backlog." Cowen's backlog shows that the company has made nine deals since March 31 (after the quarter just
reported), bringing deals to a total of 14 for the year.
More earnings news will prove just how strong the M&A trend is. Goldman Sachs Group Inc. (GS:NYSE) announces tomorrow.
Also Morgan Stanley (MS:NYSE) announces on June 20.
Keep an eye on these announcements, as they're indicators that the merger-and-acquisition trend remains strong.
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Earnings Announcements
Adobe Systems, Bear Stearns, Del Monte Foods, Global Crossing, and Stratos Lightwave Inc are releasing earnings.
Unlock Dates for June 2007
6/13/07 – Cal Dive International Inc is unlocking 22.1 million shares.
6/13/07 – Newstar Financial is unlocking 12 million shares.
6/18/07 – Claymont Steel Holdings Inc is unlocking 8.7 million shares.
6/18/07 – Melco PBL Entertainment is unlocking 60.25 million shares.
6/18/07 – Trina Solar is unlocking 5.3 million shares.
6/19/07 – Universal Power Group Inc is unlocking 3 million shares.
Upgrades and Downgrades
Molson Coors Brewing upgraded by UBS from Neutral to Buy.
Dr. Reddy's upgraded by Credit Suisse from Neutral to Outperform.
Blockbuster upgraded by Citigroup from Hold to Buy.
Horizon Offshore downgraded by Oppenheimer from Buy to Neutral.
Alcan downgraded by Bear Stearns from Outperform to Peer Perform.
Dean Foods downgraded by JP Morgan from Overweight to Neutral.
Brought to you by Taipan Financial News.
http://www.taipanfinancialnews.com
Today's Exclusive TFN Video
Under the Microscope With Krista Das
"100% Gain in Steel and Mining"
GRESSOR's new editor, Neil DeFalco, exited a Brazilian mining company for a 100% gain on Tuesday. In addition, Diligent Investor editor Ann Sosnowski exited half of her position in a steel manufacturer for a hefty 97% gain.
Quote of the Day
"Here's the latest in the John Edwards campaign. It turns out, yes, there are two Americas and neither one of them is voting for him."
- Jay Leno, June 12, 2007
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