Stifel Financial Corp.
) slid 2.06% in the trading session on Friday, after it entered
into an agreement to acquire De La Rosa & Co. on Thursday.
Even though the acquisition is expected to reinforce Stifel's
underwriting business in California, investors' sentiment was
negative, primarily due to the sluggishly recovering Californian
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The acquisition is expected to be completed in the first quarter
of 2014. However, financial details weren't divulged by either
company. Immediately following the completion, the employees of
De La Rosa will be integrated into the Stifel team.
Founded in 1989, De La Rosa & Co. has transformed into one of
the principal investment banking firms serving the California
public finance market. Stifel's acquisition of this investment
banking firm deepens its Californian commitment that was first
noticed after it acquired Stone & Youngberg in 2011.
For De La Rosa, the integration with Stifel will give its clients
a wider range of investment banking products. Stifel's expertise
will also help De La Rosa to enhance its existing offerings.
We note that the acquisition will increase Stifel's share in the
Californian market, which is projected to grow in the latter part
of 2014 and continue into 2015, according to the Business
Forecasting Center at the University of the Pacific.
Additionally, the deal will drive Stifel's revenue growth.
Stifel Financial currently carries a Zacks Rank #2 (Buy). Other
investment brokerage firms worth considering include
Investment Technology Group Inc.
LPL Financial Holdings Inc.
), both carrying a Zacks Rank #1 (Strong Buy). Another stock
KCG Holdings, Inc.
) with the same Zacks Rank as Stifel is also worth a look.