GAIN Capital Upped to Strong Buy - Analyst Blog

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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 The NASDAQ OMX Group, Inc.



This article appears in: Investing , Business , Stocks

Referenced Stocks: AMTD , GCAP , LPLA , PJC

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