Jefferies Financial (JEF) in McElvaine Value Fund 2020 Q4

Strategic Asset Disposition and Core Business Focus

4 days ago

Summary

Investment rationale: Focus on core business and asset disposition.
Market positioning: Strong presence in investment banking and asset management.
Risks and challenges: Market volatility and economic downturns.
Recent performance: Record earnings in core business segments.
Future outlook: Continued shareholder returns through dividends and buybacks.

In the McElvaine Value Fund 2020 Q4 letter, Jefferies Financial (JEF, Financial) was highlighted as a significant holding, representing 11% of net assets. The fund manager, Tim McElvaine, emphasized Jefferies' strategic focus on its core business segments, including its broker/dealer operations, investment banking, and asset management, while disposing of non-core assets to enhance shareholder value.

"I view JEF as having 4 parts: a broker/dealer in bonds and equities, an investment bank, an asset manager and a collection of 'extra assets'. The tangible book value of the first 3 parts ('core') is approx. $21 per share and the value of the 'extra assets' I believe exceeds $10 per share. About 3 years ago, JEF embarked on a process to dispose of its extra assets and refocus on its core business. Since then JEF has returned over $3.4Bn to shareholders through dividends and accreditive share repurchases. I expect this process to continue with a conclusion sometime in the next 24 months." — Tim McElvaine, McElvaine Value Fund, Q4 2020 Fund Letter

Read full letter at gurufocus McElvaine Value Fund 2020 Q4 page.

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