Is Jefferies Really a ‘Sell’? (JEF)

Jefferies Group, Inc. (NYSE: JEF) had to endure vast punishment during the Euro meltdown over more rumors than can adequately be counted.  In fact, some were calling it openly as “the next MF Global.”  That characterization was not a fair one, at least that is what the company and disclosed in its many disclosures over its holdings. 

So, why did S&P’s Capital IQ take an already cautious rating of HOLD down to the ugliest rating of SELL in its coverage?

It turns out that many investors just are not over all of the concerns.  Even if the situation in late-2011 was a gross over-reaction that was exacerbated by those betting against Jefferies, it is hard to blame many for remaining skeptical of financial stocks even if these are not all bank stock concerns.  Many great banks are at large discounts to book value because of the regulatory and earnings uncertainties ahead.

Jefferies may be outside of the compensation oversight entirely and it may not have any bank exposure worth worry. Shares of Jefferies are down 1.2% at $16.00, but its 52-week trading range is $9.50 to $26.19.