74
Bear Stearns
Long known as one of the hungriest and most aggressive players on Wall Street, Bear Stearns posted its fifth straight year of record profits. That’s in addition to eight decades of staying in the black and surviving bear markets, crashes, and more than a handful of brokerage liquidations. While Bear has historically earned much of its reputation and keep as a bond trader and clearinghouse, under CEO James Cayne it has lately parlayed that currency into becoming a jack-of-all-financial-trades. Its merchant banking arm has been busily making private equity investments in businesses ranging from Latin American consumer-finance to a maker of playground equipment. Bear’s prime brokerage division, which serves hedge funds and other VIP institutional investors, has seemingly come out of nowhere to become one of the Street’s most envied. Shares of the 84-year-old firm, chronically the subject of takeover talk, have soared 270% in the past six years.
| Overall Grade | B+ |
|
| Market Data | BSC | |
| Market Value (2/28/2007) |
$17.9 Billion |
|
| Profitability* | 24.6% | B- |
| Sales Growth Rate** | 31.5% | A- |
| 12-Month Sales | $16.6 Billion |
|
| 12-Month Net Income | $2.1 Billion |
|
| Total Return | Past 12 Months14.1% | Past 36 Months78.1% |
| Economic Sector | Financials | |
| Industry | Investment Banking & Brokerage | |
The overall sector letter grade reflects how the weighted average of the return on income, or return on equity, and sales growth grades compare with others in the same sector. For the overall grade as well as the ROE/ROI and sales growth grades, an "A" places a company in the top 7% of its sector and an "A-" in the top 14% of the sector. The actual ranking was done using the underlying numerical measures. Grades are for information only.
* For nonfinancial companies, three-year average pretax operating profit before interest and special items as a percentage of average invested capital. For financial companies, pretax profits as a percentage of average shareholder's equity.
*Three-year average annual sales growth based on the most recently reported 36 months, calculated using the least-squares method.
