Market Perform - Price 26.92 on Sept. 29
by JMP Securities

We're upgrading from Market Underperform to Market Perform, and raising our fiscal-year '09E-EPS from $1.07 to $1.17 (consensus is 97 cents), and our FY10 EPS estimate from $1.40 to $1.50 (consensus is $1.23). …fundamentals in the fixed-income markets have remained strong…the pace and stickiness of the recovery in credit markets has been faster than expected…allow[ing] Jefferies to report higher-than-expected revenues….The main drivers… include a continued, robust fixed-income sales and trading environment…narrowing of high-yield credit spreads…and a more robust underwriting calendar. Jefferies trades at 17.9 times our revised '10 EPS forecast (versus peers' 18.5 times), 1.8 times our 12-month stated book-value forecast. While JEF appears [to be]…trading at a fair-to-full valuation, with [rising] EPS numbers, we see little to push the shares lower. Market cap: $5.5 billion.

I’d look at the companies that are building up when others are paring down, says Guy Adami. For example, I like Jeffries (JEF) although right now I think the stock is ahead of itself.

In the financials I’m keeping an eye on Jefferies (JEF) and Greenhill (GHL), says Guy Adami. And I’m also watching Lazard (LAZ) and Raymond James (RFJ). They pulled back on Tuesday and I think it’s time to dip a toe.

As for Jefferies, Adami talks about it all the time. “They’re hiring when most are firing,” and that speaks volumes.

I’d look at Jefferies (JEF), said Guy Adami. Where everyone else is cutting they’re hiring. I think they set up well for the new Wall Street.

Look at Jefferies [JEF], says Adami. Their quarter was a disaster but they’re positioned for a rebound. When the world comes back together they should win.

Jefferies (JEF) was upgraded to market perform, Wachovia said. Cash equities business is performing well, and the investment from LUK should help provide a backstop.

From a recent Mad Money show: "Very well run but I'm not recommending any brokers. I'm done recommending brokers and hurting people."

From a recent Mad Money show: "Very well run but I'm not recommending any brokers. I'm done recommending brokers and hurting people. "

I think boutique investment banks are the winners, says Guy Adami. You can’t race after them but Lazard [LAZ], Greenhill [GHL] and Jefferies [JEF] have been hiring when the others have been firing. They’re getting back to basics and at the end of this, they should be on top.