GO
Loading...

As M&A Returns, These Banks Win: Top Analyst

Wednesday, 30 May 2012 | 7:14 PM ET

Top Bernstein bank analyst Brad Hintz tells us M&A us about to pick up and a handful of banks are best positioned for the deal activity.

Hintz, who was formerly the CFO at Lehman Brothers, believes with rates at historic lows and companies flush with cash – management teams will be hard pressed not to make strategic acquisitions.

And Hintz believes boutique investment banks, such as Lazard, Evercore and Greenhill are poised to benefit most.

In a note Hintz points to three factors for the call:

Boutique Banks' M&A Boon
Very high corporate cash balances should provide tailwind to M&A, says Brad Hintz, Bernstein Research.

1. Boutiques have been taking share from the large banks as dissatisfied managing directors in investment banking have migrated from the big banks to these pure play M&A houses.

2. These firms don’t have material trading businesses no prop desks no swing for the fences risk takers. They are not regulated by an intrusive Federal Reserve. The press and congress are not vilifying them. There are no “occupy wall street bands” heating up tar and plucking feathers ready for these bankers.

3. They have a simple business model – they sell advice. And they sell it very profitably. 35 BP times the size of a deal is a typical fee. Thus the advice business generates 40% pretax margins on the revenues.

“A lot of deal teams are out there working,” he says. “All of the models scream that M&A should be coming back.

Hintz tells us the one wild card is Europe – but as long as Europe ‘kicks the can down the road’ he thinks that should be enough to assuage the M&A markets.

* MOST POPULAR:"Marc Faber: 100% Chance of Global Recession"Our Marc Faber article was the most viewed Fast Money post during the entire month of May. You didn't miss it, did you?

Posted by CNBC's Lee Brodie





______________________________________________________
Got something to to say? Send us an e-mail at fastmoney-web@cnbc.com and your comment might be posted on the Rapid Recap. If you'd prefer to make a comment, but not have it published on our Web site, send those e-mails to fastmoney@cnbc.com.


Trader disclosure: On May 30, 2012, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders; Tim Seymour is long BAC; Tim Seymour is long INTC; Guy Adami is long C; Guy Adami is long GS; Guy Adami is long INTC; Guy Adami is long AGU; Guy Adami is long MSFT; Guy Adami is long NUE; Guy Adami is long BTU; Karen Finerman is long AAPL; Karen Finerman is long BAC; Karen Finerman is long JPM; Karen Finerman is long WMT; Karen Finerman is long TGT; Karen Finerman is long RIMM; Karen Finerman is long HPQ; Karen Finerman is long GLUU; Karen Finerman is short SPY; Karen Finerman is short IWM; Karen Finerman is short MDY; Pete Najarian is long AAPL CALLS; Pete Najarian is long AAPL; Pete Najarian is long C; Pete Najarian is long MS CALLS; Pete Najarian is long INTC; Pete Najarian is long SBUX; Pete Najarian is long PEP; Pete Najarian is long HPQ; Pete Najarian is long FB

For Brad Hintz
Brad Hintz is long CME
Brad Hintz holds an equity position in MS
The following company was a non-investment banking client of Bernstein: MS
The following company was a non-investment banking client of Bernstein: GS

CNBC.com with wires.

  Price   Change %Change
AERT
---
GHL
---
LAZ
---

Featured

Contact Fast Money

  • Showtimes

    Halftime Report - Weekdays 12p ET
    Fast Money - Weekdays 5p ET
  • Melissa Lee is the host of CNBC's “Fast Money” and “Options Action.”

  • Scott Wapner is host of the "Fast Money Halftime Report," which airs weekdays from 12 p.m. to 1 p.m. ET.

  • Guy Adami is a contributor on CNBC's "Fast Money." He also is managing director of stockMONSTER.com.

  • Najarian, the "Pit Boss," is cofounder of optionMONSTER.com, a news site for options traders.

  • Finerman is president of Metropolitan Capital Advisors, Inc., a company she co-founded.

  • Founder of EmergingMoney.com

  • Chief Market Strategist for Virtus Investment Partners & CNBC Contributor

Halftime Report