GAIN Capital Upped to Strong Buy - Analyst Blog

By Zacks Equity Research,

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On Mar 1, Zacks Investment Research upgraded GAIN Capital Holdings, Inc. ( GCAP ) to a Zacks Rank #1 (Strong Buy).

Why the Upgrade?

GAIN Capital has been witnessing rising earnings estimates on the back of strong fourth-quarter 2013 results. The investment broker has reported positive earnings surprises in 3 of the last 4 quarters with an earnings beat of 46%. Moreover, the long-term expected earnings growth rate for this stock is 16%.

GAIN Capital reported fourth-quarter 2013 adjusted earnings on Feb 27 with earnings per share of 13 cents easily beating the Zacks Consensus Estimate of 7 cents by 85.71%. Moreover, earnings compared favorably with the prior-year loss of 11 cents.

Better-than-expected results were driven by strong top-line performance, which more than doubled on a year-over-year basis. However, elevated expenses (up 96%) were a dampener.

GAIN Capital's EBITDA (Earnings before Interest, Taxes, Depreciation and Amortization) stood at $13.7 million, up substantially year over year. Moreover, EBITDA margin stood at 16% compared with negative 15% in the year-ago period.

Further, as of Dec 31, 2013, cash and cash equivalents came in at $39.9 million, up 8.4% year over year. Moreover, shareholders' equity stood at $234.3 million compared with $163.7 million as of Dec 31, 2012.

Following fourth-quarter 2013 results, the Zacks Consensus Estimate for 2014 moved up 6.4% to $1.00 per share, over the last 7 days. For 2015, the Zacks Consensus Estimate advanced 4.2% to $1.24 per share over the same time period.

Other Stocks to Consider

Some other investment brokers worth considering include TD Ameritrade Holding Corporation ( AMTD ), Piper Jaffray Companies ( PJC ) and LPL Financial Holdings Inc. ( LPLA ).  All 3 companies carry a Zacks Rank #1.

TD AMERITRADE (AMTD): Free Stock Analysis Report

GAIN CAP HLDGS (GCAP): Free Stock Analysis Report

LPL FINL HLDGS (LPLA): Free Stock Analysis Report

PIPER JAFFRAY (PJC): 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: AMTD , GCAP , LPLA , PJC

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