Federated Investors Hits 52-Week High - Analyst Blog

By Zacks Equity Research,

Shutterstock photo

Shares of Federated Investors, Inc. ( FII ) achieved a new 52-week high, touching $31.20 on Mar 26. The stock closed the session at $30.45, reflecting a solid year-to-date return of 8.7%. The trading volume for the session was 1.7 million shares.

Despite the strong price appreciation, this Zacks Rank #3 (Hold) stock still has upside left, given the positive earnings surprises it delivered in the past two quarters. Further, the long-term expected earnings per share growth rate for this regional bank now stands at 8.0%

Growth Drivers

Recent acquisitions, global expansion and decent fourth-quarter results, including lower operating expenses and strong liquidity position, primarily drove the stock price.

On Mar 14, Federated Investors announced a deal to acquire fixed-income assets worth $421 million from Huntington Asset Advisors, Inc., an investment adviser subsidiary of The Huntington National Bank. The fixed-income assets of Huntington will be merged into five existing Federated fixed-income mutual funds.

On Jan 23, Federated Investors came out with fourth-quarter 2013 earnings of 39 cents per share, beating the Zacks Consensus Estimate by 8.3%.

Results were aided by a fairly liquid balance sheet, strong capital position, lower operating expenses and diversified asset as well as product mix.

However, a slight fall in assets under management and decline in the top line were the downsides. Moreover, net income including non-recurring items declined in the fourth quarter.

Some better-ranked stocks in this space include AllianceBernstein Holding L.P. ( AB ), Fortress Investment Group LLC ( FIG ) and Lazard Ltd. ( LAZ ). All of these sport a Zacks Rank #1 (Strong Buy).

ALLIANCEBERNSTN (AB): Free Stock Analysis Report

FORTRESS INVEST (FIG): Free Stock Analysis Report

FEDERATED INVST (FII): Free Stock Analysis Report

LAZARD LTD (LAZ): Free Stock Analysis Report

To read this article on Zacks.com click here.

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: AB , FIG , FII , LAZ

More from Zacks.com




Follow on:

Find a Credit Card

Select a credit card product by:
Select an offer:
Data Provided by BankRate.com