Shares of financial services company Jefferies Financial Group Inc. (JEF) have climbed 52% over the past 12 months. Recently, JEF posted a mixed set of numbers for the fourth quarter with top-line lagging estimates.
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Revenue dropped 3% year-over-year to $1.81 billion, missing estimates of $1.88 billion. This decrease was primarily attributable to lower Asset Management and Merchant Banking revenues.
Earnings per share at $1.36 beat expectations of $1.31 per share. Moreover, JEF has upped its dividend by 20% to $0.30 per share. The dividend is payable on February 25.
With these developments in mind, let us take a look at the changes in JEF’s key risk factors that investors should know.
Risk Factors
According to the TipRanks Risk Factors tool, Jefferies’ top risk category is Finance & Corporate, contributing 35% to the total 34 risks identified. In its recent report, the company has added two key risk factors.
Under the Finance & Corporate risk category, JEF noted that at the end of November, it had ~$776.2 million invested in Jefferies Finance. This investment may not be successful due to various factors that are outside of JEF’s control, and such an event could affect its results and financials adversely.
Under the Macro & Political risk category, JEF highlighted that its business could be disrupted due to climate change concerns and incidents. This may adversely affect the company’s profitability in certain investments, its reputation, and the creditworthiness of its counterparties.
Compared to a sector average, JEF’s Macro & Political risk factor of 8% is at 24%.
Tracking Insiders
Keeping a tab on insiders stocks can provide timely insights for retail investors. According to TipRanks data on Insider Activity, insiders have sold Jefferies shares worth $12.7 million in the last three months, indicating a neutral insider confidence signal for the stock.
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