On Oct 7, 2013, we initiated our coverage on investment
Affiliated Managers Group Inc.
) at Neutral, based on its strong organic growth and continued
inflows. However, persistently rising operating expenses and
significant intangible assets in the balance sheet remain causes
AFFIL MANAGERS (AMG): Free Stock Analysis
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Why the Neutral Stance?
Affiliated Managers has significant organic growth prospects. The
company's portfolio of investment products provides it an edge
over competitors, when it comes to fulfilling the diverse needs
of clients. Moreover, with its strong balance sheet and liquidity
position, the company is capable of investing in other companies.
Further, the Zacks Consensus Estimate for 2013 rose nearly 1% to
$9.46 per share over the last 90 days. For 2014, the Zacks
Consensus Estimate moved north by roughly 2% to $11.05 per share
over the same time frame. Hence, Affiliated Managers currently
carries a Zacks Rank #3 (Hold).
Nevertheless, increase in operating expenses remains a major
concern for Affiliated Managers. Moreover, intangible assets that
form a substantial portion of the company's balance sheet are
subject to annual impairment reviews. This could pose a
challenge, going forward.
Although Affiliated Managers' overseas presence is a positive,
risks stemming from stringent regulations, political changes or
instability abroad, foreign exchange fluctuations and weak
performance of regional economies can negatively affect the
company's top line.
Other Stocks to Consider
Other investment management stocks that are currently performing
well and are worth considering include
GAMCO Investors, Inc.
Waddell & Reed Financial, Inc.
Noah Holdings Limited
). All these stocks carry a Zacks Rank #1 (Strong Buy).