The Zacks Analyst Blog Highlights:Bank of New York Mellon, JPMorgan Chase, Goldman Sachs Group, DDR and Blackstone Group
CHICAGO, May 24, 2013 /PRNewswire/ -- Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include The Bank of New York Mellon Corporation (NYSE: BK), JPMorgan Chase & Co. (NYSE: JPM), The Goldman Sachs Group, Inc. (NYSE: GS), DDR Corp. (NYSE: DDR) and The Blackstone Group LP (NYSE: BX).
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Here are highlights from Thursday's Analyst Blog:
BNY Mellon to Boost Workforce
As part of its growth strategy, NY-based The Bank of New York Mellon Corporation (NYSE: BK) announced its intention to expand the workforce at its wealth management unit. The company plans to strengthen the unit by roughly 100 additional positions.
The major 2-year recruiting campaign is expected to increase BNY Mellon's workforce at the wealth management unit by 50% by the end of 2014. BNY Mellon plans to hire portfolio managers, private bankers and mortgage bankers as well as wealth strategists at its wealth management unit. Furthermore, the company intends to recruit extra sales support staff at the unit.
Through its 2-year hiring plan, BNY Mellon will recruit employees equaling approximately 5% of its current workforce of 1,900 employees.
In the past, BNY Mellon's wealth management unit made strategic acquisitions to expand its global footprint. Further, the unit is now more focused on increasing its workforce. Moreover, it intends to enter new markets by expanding its geographic footprint and has therefore opened new offices in cities including Dallas, Washington and the Cayman Islands.
BNY Mellon plans to bolster its workforce by opening new offices at its present locations besides operating new offices in other important wealth markets.
In 2008, when U.S. was battered by the financial crisis, the new regulations were implemented. This led to a decline in revenues generated by the companies including BNY Mellon and banking giants like JPMorgan Chase & Co. (NYSE: JPM) and The Goldman Sachs Group, Inc. (NYSE: GS). Since then, these companies have been focusing more on wealthy clients to get better regular fees and increase market share.
BNY Mellon's plan to increase its workforce is expected to strengthen the global distribution capabilities of its wealth management unit. This is expected to auger well for the organic growth of the unit.
However, this might hinder the company's cost cutting initiatives. The company targets to slash its costs by about $700 million by 2015.
BNY Mellon currently carries a Zacks Rank #3 (Hold).
Fitch Raises DDR's Rating
Fitch Ratings upgraded the Issuer Default Rating (IDR) of DDR Corp. (NYSE: DDR) to 'BBB-' from 'BB+'. The outlook was changed to 'Stable' from 'Positive.' The rating upgrade follows the company's recent disclosure regarding the acquisition of a portfolio of shopping centers from its existing joint venture (JV) with The Blackstone Group LP (NYSE: BX).
DDR, in particular, agreed to buy Blackstone's stake in 30 of 44 shopping centers of the JV for $1.46 billion. The deal, which is expected to close in the fourth quarter of 2013 subject to customary closing conditions, is projected to substantially enhance DDR's cash flow.
According to Fitch, the deal would help generate recurring cash flow in excess of fixed-charges at a level consistent with an investment-grade rating. Moreover, the rating agency noted management's prudent focus on improving its credit profile, decent liquidity and solid access to capital. The rating may be further adjusted -- upward or downward -- based on the company's leverage and fixed-charge coverage.
The rating upgrade of DDR is encouraging. In fact, this plays a major role in preserving investor confidence in the stock and helps boost its creditworthiness in the market.
As a matter of fact, this Blackstone portfolio deal adds premium properties to DDR's wholly-owned portfolio, which are located in regions with higher household income and greater population density than DDR's current portfolio. These would include Riverdale Village in Minneapolis, Shoppers World in Boston, Woodfield Village Green in Chicago and Fairfax Towne Center in Washington DC.
Moreover, going forward, DDR has growth opportunities from marking rents to market (with average base rent of $13.81 per square foot, 5% below the DDR prime portfolio) as well as the chance to add value through redevelopment and remerchandising projects, tenant downsizing and center expansions.
DDR currently holds a Zacks Rank #3 (Hold).
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