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The sale of Allworth Financial is heating up with a winning bidder expected soon, according to four banking and private-equity executives.

The auction has narrowed to three private equity firms; final bids were due last week, Oct. 6, two of the sources said.

Raymond James

(ticker: RJF) and

Moelis

(MC) are advising on the process, people said.

Allworth, which is owned by Parthenon Capital, is expected to sell for roughly $750 million to $800 million, one of the people said.

Allworth is an RIA aggregator that buys up smaller wealth managers. The Sacramento firm scooped up Capstone Capital in May, Houston Asset Management in April and, in October, it bought Retirement Advisors of America. Allworth, in May, had roughly $8 billion of assets under management, according to a statement.

Parthenon invested in Allworth in 2017 when the firm was known as Hanson McClain Advisors. Parthenon, of Boston and San Francisco, invests in financial services, health care services and business services. The private-equity firm is investing out its sixth flagship fund which raised $2 billion in December.

The Allworth sale is the latest in the wealth and asset management space. Last week,

Morgan Stanley (MS)

shocked many when it agreed to buy asset manager Eaton Vance (EV) for $7 billion. The sale is expected to set off more consolidation. “If

Eaton Vance

is selling— they’re considered one of the strong companies—then that tells you the mediocre and bad companies are selling,” one banker said.

Private-equity firms have been frequent investors of wealth managers. Hellman & Friedman owns Edelman Financial Engines, while TA Associates acquired Wealth Enhancement Group from Lightyear Capital in 2019. (TA and Genstar Capital own Orion Advisor Solutions.) GTCR bought a minority stake of CapTrust in June. Genstar and Lovell Minnick Partners sold a minority

M.D.C. Holdings (MDC) is a buy for the total return and dividend income investor. M.D.C. Holdings is among the largest homebuilders in the United States and has an increasing owned backlog of over 17,000 lots to develop and options on another 7,000.

The company has steady growth and has the cash it uses to develop new properties and homes for the average home buyer. The lower interest rates give a tailwind to the company business. The Fed has indicated that they intend to keep interest rates low for at least a year or maybe two.

As I have said before in previous articles.

I use a set of guidelines that I codified over the last few years to review the companies in The Good Business Portfolio (my portfolio) and other companies that I am reviewing. For a complete set of guidelines, please see my article “The Good Business Portfolio: Update to Guidelines, March 2020”. These guidelines provide me with a balanced portfolio of income, defensive, total return, and growing companies that hopefully keeps me ahead of the Dow average.

When I scanned the five-year chart, M.D.C Holdings has a good chart going up and to the right for 2016, 2017, and 2019 in a strong solid pattern. It is a cyclic company and was down in 2015 and has recovered well in 2019 from the flat year of 2018. 2020 was doing good until the pandemic hit, then it went down like a rock in water but has recovered nicely in the past six months. The PE is low at 11, and the earnings growth looks good at 10%, making MDC a strong buy.

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Fundamentals and company business review

The method I use to compare companies is to look at the total return, as shown from my

Key Takeaways:

  • Recent uptick in rates might spell better times ahead for banks
  • Credit loss provisions still expected to weigh, but cost-cutting has likely helped
  • Housing market seen aiding Wells, while Citigroup’s
    C
    credit card business stays in focus

A lethal combination of ultra-low interest rates, credit worries, a steep economic slowdown, and tough government regulations ganged up on big banks this year. Despite that, expectations for the group’s Q3 earnings performance are on the rise.

Granted, the numbers don’t look like something to throw a party over, with research firm FactSet predicting cumulative Financial earnings to fall 19.4% from a year ago. The good news is that those expectations look a lot sunnier than where analysts were back in June, when they predicted a Financials Q3 earnings cratering of 34.4%.

Why the improvement? For one thing, many banks benefit from the energetic capital markets and the trading revenue they provide. Second, low rates have their good side, encouraging more loan activity.

Some of the big banks leading the upward earnings expectations meter include JP Morgan Chase
JPM
(JPM) and Wells Fargo
WFC
(WFC), FactSet reported. It appears likely they both could have relatively positive Q3 results despite all the headwinds they’ve faced and continue to face in this rough 2020.

The same goes for Citigroup (C), which, like JPM, is expected to report Q3 earnings early tomorrow. Those will be followed Wednesday morning by WFC.

Before zeroing in on individual banks, let’s scroll back for a broader view. Big banks haven’t performed well in the market this year, but they’ve generally done a great job setting aside money for possible credit losses and cutting costs. This could position most of them pretty nicely for any economic rebound once the pandemic passes.

That said, the credit

NEW YORK (Reuters) – While good business news has been in short supply, investors may take slight comfort in coming weeks from U.S. corporate earnings that are likely to be bad, but not as bad as they have been.

Analysts expect third-quarter S&P 500 earnings to have fallen 21% compared with the year-ago quarter, a big improvement from second-quarter’s 30.6% drop that was most likely the low point for earnings this year because of coronavirus-fueled lockdowns, according to IBES data from Refinitiv.

Earnings reporting will get rolling next week with results from some of the big U.S. banks, likely impacted by near record low interest rates and the pandemic-induced recession. JPMorgan & Co.

and Citigroup

both release results on Tuesday.

(Graphic: S&P 500 Q3 earnings look bad, but not as bad as Q2 – https://graphics.reuters.com/USA-STOCKS/azgvoaoyzvd/chart.png)

Overall, S&P 500 quarterly results tend to beat analysts’ cautious expectations, and they could do that even more than usual this reporting season, strategists said. In a break from the typical trend, guidance from U.S. companies has been more positive than negative and estimates have been improving in recent weeks to reflect more upbeat guidance.

Whether that will be enough to support stocks in the weeks ahead is up for debate.

“Very rarely in the last 10 years have we seen earnings estimates moving higher after a quarterly reporting season,” said Art Hogan, chief market strategist at National Securities in New York.

“That’s a very good sign. It’s a sign there’s a strong possibility this quarterly earnings season is now going to be better than expected,” he said. “The only problem is, now that we’ve entered the fourth quarter, a lot of the economic indicators are plateauing.”

That could weigh on fourth-quarter guidance and overshadow some of the better-than-expected results, he said.

Data this past

By Caroline Valetkevitch

NEW YORK (Reuters) – While good business news has been in short supply, investors may take slight comfort in coming weeks from U.S. corporate earnings that are likely to be bad, but not as bad as they have been.

Analysts expect third-quarter S&P 500 earnings to have fallen 21% compared with the year-ago quarter, a big improvement from second-quarter’s 30.6% drop that was most likely the low point for earnings this year because of coronavirus-fueled lockdowns, according to IBES data from Refinitiv.

Earnings reporting will get rolling next week with results from some of the big U.S. banks, likely impacted by near record low interest rates and the pandemic-induced recession. JPMorgan & Co. <JPM.N> and Citigroup <C.N> both release results on Tuesday.

(Graphic: S&P 500 Q3 earnings look bad, but not as bad as Q2 – https://graphics.reuters.com/USA-STOCKS/azgvoaoyzvd/chart.png)

Overall, S&P 500 quarterly results tend to beat analysts’ cautious expectations, and they could do that even more than usual this reporting season, strategists said. In a break from the typical trend, guidance from U.S. companies has been more positive than negative and estimates have been improving in recent weeks to reflect more upbeat guidance.

Whether that will be enough to support stocks in the weeks ahead is up for debate.

“Very rarely in the last 10 years have we seen earnings estimates moving higher after a quarterly reporting season,” said Art Hogan, chief market strategist at National Securities in New York.

“That’s a very good sign. It’s a sign there’s a strong possibility this quarterly earnings season is now going to be better than expected,” he said. “The only problem is, now that we’ve entered the fourth quarter, a lot of the economic indicators are plateauing.”

That could weigh on fourth-quarter guidance and overshadow some of the better-than-expected results,