Business & Finance
Business and Finance
Business and Finance
Tue, December 7, 2010
Mon, December 6, 2010 Goldman Sachs Group, Morgan Stanley, Barclays, Nicor and JPMorgan Chase
CHICAGO--([ BUSINESS WIRE ])--Zacks.com Analyst Blog features: Goldman Sachs Group Inc. (NYSE: [ GS ]), Morgan Stanley (NYSE: [ MS ]), Barclays plc. (NYSE: [ BCS ]), Nicor Inc. (NYSE: [ GAS ]) and JPMorgan Chase & Co. (NYSE: [ JPM ]).
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Here are highlights from Fridaya™s Analyst Blog:
Goldman to Sell Mortgage Unit?
Goldman Sachs Group Inc. (NYSE: [ GS ]) is thinking for a sale of Litton Loan Servicing LP, its mortgage servicing division, according to a report in the Financial Times. The sale would result in the closure of Goldmana™s business of home loan collections and foreclosing on delinquent borrowers.
The report has cited that at least one prospective buyer approached Goldman for this unit. However, the talks collapsed over the price issue and no sale is on the cards right now. According to the report, the Litton business unit is not considered as part of Goldmana™s traditional business activities such as investment banking and trading services.
Goldman had paid around $470 million to buy Litton in December 2007. Litton services around 320,000 subprime loans with an unpaid principal balance of $50 billion. Litton was one among the several mortgage servicers facing federal investigations over their foreclosure practices. In line with other servicers, the company had temporarily suspended its foreclosure activities in October.
Besides Goldman, Morgan Stanley (NYSE: [ MS ]) and Barclays plc. (NYSE: [ BCS ]) have also forayed into this business of home loan collections. But the tough market forced the companies selling these business units as their profit plunged significantly when the borrowers defaulted on the loans.
Goldman has hit the headlines several times in 2010 over charges and penalties. However, the company could post third quarter 2010 earnings per share of $2.98, significantly ahead of the Zacks Consensus Estimate of $2.29. Results reflected a strong performance in Investment Banking business and lower operating expenses. Though economic conditions were challenging, the company gained from a solid balance sheet.
Nicor Looking for Suitors?
Nicor Inc. (NYSE: [ GAS ]), a natural gas utility, has been put up for sale, Bloomberg News has reported. The company is working with JPMorgan Chase & Co. (NYSE: [ JPM ]) to find a buyer, according to people familiar with the situation, who declined to be identified because a sale has not been announced.
Some utility companies and infrastructure funds have looked at the company and decided the price was too high for a bid, said sources. Naperville, Illinois-based Nicora™s shares are currently trading at 15 times estimated 2011 earnings, compared with about 12 times for the Standard & Poora™s 500 Utilities Index.
Nicor Inc. is a holding company whose principal business is gas distribution. The companya™s largest subsidiary is Nicor Gas, a distributor of natural gas that provided almost 80% of the companya™s 2009 sales. Nicor also owns Tropical Shipping, a transporter of containerized freight serving the Bahamas and the Caribbean region.
Founded in 1954 as Northern Illinois Gas, Nicor Gas is one of the biggest gas utilities in the nation with a large customer base (more than 2 million Illinois homes and businesses) and an enviable supply position that includes access to eight interstate pipeline connections and significant underground storage assets. It maintains a low base rate (even after the rate relief received in 2009), compared with the other major gas utilities in Illinois and in the country.
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