Updated from Friday, June 20.
Sunday, The Financial Times reported that Goldman Sachs (GS - Get Report) is expected to pare up to 10% of workers in a division that handles mergers and acquisition advice and corporate fundraising over the course of the year.
Today, according to a Reuters report, Goldman Sachs downgraded the U.S. financial sector to " underweight."
So are there any bright spots in the financial sector?KU Stock-Pickers Find a Trend-Bucking Bank " How KU Stock-Pickers Play Offense" introduced you to Professor Catherine Shenoy and the $1.4 million student-run Applied Portfolio Management investment fund at the University of Kansas ("KU") School of Business. TheStreet.com recently caught up with Shenoy to find out how the APM fund has fared during these turbulent market times and to get her take on the state of the financial sector. The following interview includes one of the few banks that is delivering for shareholders, with a year-to-date gain of almost 25%. TheStreet.com: The APM class passed on the many of the most well-known companies in the financial sector long before the high-profile meltdowns and shakeups. Why? And what can an incoming APM student or beginning individual investor learn from how your class analyzed the sector and its companies? Shenoy: Any APM student or investor needs to understand the balance sheet of a financial company. Until it is clear that the credit markets have "cleared" and transactions can take place based on the values on the balance sheets, we probably wouldn't be able to "get close" enough to understand where the values are. Going forward, the earnings streams may look very different. If the big banks can't boost earnings by using lots of leverage, then we need a new model for large financial institutions. TheStreet.com: What is your current take on the financial sector? Shenoy: Still cloudy. TheStreet.com: That said, one of the APM fund's current holdings is Capitol Federal Financial (CFFN - Get Report). Shenoy: We've actually held Capitol Federal since late 2002. During the later part of the mortgage boom it was hard
|Capitol Federal Financial's Important Numbers|
|Interest and Dividend Income ($M)||156||127||106|
|Net Income ($M)||65||48||33|
|Dividend per Public Share||2.3||2.09||2.09|
|Shares outstanding (Millions)||74.3||74||74.2|
|Public Shares (Millions)||20.5||20.4||22.1|
|Earnings per share - reported||0.9||0.66||0.44|
|Earnings per share - adjusted||3.17||2.35||1.46|
|P/E - reported||36.6||58.7||70.4|
|P/E - adjusted||10.4||16.5||21|
|Stock Price - Year End||32.94||38.42||31|