Anyone have access to this article from Barron? Feel free to put it here.
5 replies (most recent on top)
Does anybody believe anything that this EL group led by Mr. Rogers (pun intended) says. The merger was the first excuse, pandemic was second, now interest rates flipping from zero to five plus, what’s next Middle East turmoil. Jeeezuuus
Ok you got nailed it. Coach goes 0-10 yet they give him a raise, cut his players and promote the staff under him.
Already beginning to hear the narrative flip from "The company is not efficient so we need to cut" to "Expectations are higher across the industry so we need to cut".
I fail to see how selling the remaining insurance business, and laying off more people (when earnings stability and client run-off is your issue) is a “fix” for this bank.
It is analogous to bringing in a new head football coach. He goes 0-10 his first two years. He is given a fat raise in his third year because he trades his remaining best players for quick cash. Our situation is absurd when you think about it in those terms.
One thing really hit home reading the article. Stock analysts don’t concern themselves differentiating between cutting “bad” expenses vs the required “good” expenses needed for business health. Just show them you are doing something so they can update their spreadsheets, and all is well. No wonder there is such a weak correlation between analyst stock ratings and that stock’s future performance.
Truist Financial is acting as if a traditional activist investor is nipping at its heels—even though one hasn’t appeared.
The bank (ticker: TFC) is reportedly planning to sell its remaining 80% stake in an insurance-brokerage business to private-equity firm Stone Point Capital for $10 billion. Stone Point bought a 20% stake in the insurance business in February for $1.95 billion.
The reported sale comes roughly a week after Truist revealed in a filing a classic activist move: rethink the board. Eight of Truist’s directors will be stepping down at year end—four as they reach mandatory retirement age and the others moving on. That will bring the board to 13 directors—12 of them independent—from 21.
Trust declined to comment.
Truist is the product of the 2019 merger of SunTrust Bank and BB&T. Despite promises of synergies, the postmerger bank has missed estimates in 11 of 20 quarters.
Because of the turnaround potential, Truist was a Barron’s stock pick last month, and the choice of a few bulls on Wall Street, too. Wells Fargo Securities analyst Mike Mayo rates Truist stock at Overweight, and has said the company is “primed for an activist.” While one has yet to materialize, Mayo has been encouraged by recent changes.
“It is up to Truist to take strong restructuring moves or risk changes to management near term or independence longer term—i.e., it seems that Truist is less tone deaf to investor concerns,” Mayo wrote this week.
Truist reports third-quarter results on Oct. 19.
https://www.msn.com/en-us/money/companies/truist-financial-may-be-its-own-activist/ar-AA1ib8mq