Affiliated Managers Surges to 52-week High - Analyst Blog

By Zacks Equity Research,

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Shares of Affiliated Managers Group Inc. ( AMG ) crafted a new 52-week high, touching $217.48 once at the beginning of the trading session and then toward the end on Dec 31. However, the stock closed the session at $216.88, which reflects a solid return of 60.8% in 2013. The trading volume for the session was 241,033 shares.

Despite the strong price appreciation, this Zacks Rank #2 (Buy) stock has plenty of upside left, given its strong estimate revisions over the last 60 days and expected long-term earnings growth of 16.45%.

Growth Drivers

Impressive third-quarter 2013 results comprising an earnings surprise of 2.34%, significant improvement in assets under management (AUM) and a strong liquidity position were the main growth stimulants for the company.

On Nov 5, Affiliated Managers reported third-quarter 2013 economic net income (ENI) of $2.19 per share, which beat the Zacks Consensus Estimate by a nickel. Moreover, this compared favorably with ENI of $1.91 in the year-ago quarter.

A year-over-year increase of 18.0% in total revenue and a decline of 27% in non-operating expenses were tailwinds for the quarter. Moreover, AUM grew 22.2% year over year to $508.4 billion.

As of Sep 30, 2013, cash and cash equivalents soared 40% to $522.4 million from the prior-year quarter. However, a 16.8% rise in operating expenses was a downside.

Estimate Revisions Show Potency

Over the last 60 days, all 6 estimates for 2013 have been revised upward, lifting the Zacks Consensus Estimate by 1.5% to $9.66 per share. For 2014 too, all of the 6 estimates moved north, helping the Zacks Consensus Estimate advance 1.4% to $11.31 per share.

Some investment management firms are faring better such as Brookfield Asset Management Inc. ( BAM ), Virtus Investment Partners, Inc. ( VRTS ) and Waddell & Reed Financial, Inc. ( WDR ). All these stocks sport a Zacks Rank #1 (Strong Buy).

AFFIL MANAGERS (AMG): Free Stock Analysis Report

BROOKFIELD ASST (BAM): Free Stock Analysis Report

VIRTUS INVESTMT (VRTS): Free Stock Analysis Report

WADDELL&REED -A (WDR): Free Stock Analysis Report

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Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This article appears in: Investing , Business , Stocks
Referenced Stocks: AMG , BAM , ENI , VRTS , WDR

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