Greenhill, Bullish

10/18/13 11:44AM EDT

As we expected, Greenhill’s 3rd quarter earning’s result was weak, missing estimates with a result of $0.06 per share in earnings versus consensus at $0.12 per share. With a current stock dividend yield of 3.7%, and a yield that has never gone above 5.0%, we think we are close to an attractive entry point for GHL shares.

Greenhill, Bullish - cast1

As we articulated in our recent Hedgeye M&A Blackbook, we think the M&A market could have a positive 2014 which would be above Street expectations for the following reasons:

1.) Near record amounts of cash are building up on corporate balance sheets

2.) The U.S. private equity sector has just raised new capital for the first time in 4 years that needs to be invested

3.) That an inflection point in economic activity is being made in Europe which will improve M&A activity there regionally

4.) That the ongoing secular decline in U.S. volatility will spur M&A activity into 2014 as it has done historically

In an improved M&A landscape, Greenhill (GHL) stock would perform very well.

Click here to watch video 2-minute: "GHL: Big Beneficiary of M&A Uptick."

© 2024 Hedgeye Risk Management, LLC. The information contained herein is the property of Hedgeye, which reserves all rights thereto. Redistribution of any part of this information is prohibited without the express written consent of Hedgeye. Hedgeye is not responsible for any errors in or omissions to this information, or for any consequences that may result from the use of this information.