Virtus Investment Partners, Inc.
) achieved a Zacks #1 Rank (Strong Buy) on October 16 and currently
trades near its 52-week high. This asset management company is
scheduled to report third-quarter results next week, having
surpassed the Zacks Consensus Estimate by 13% in the second
quarter. Moreover, VRTS has a solid return of 55.8% over the last
Q3 Results Coming Monday
Virtus Investment Partners is expected to release its third quarter
results on October 29. The Zacks Consensus Estimate is calling for
$1.23 per share on revenue of $71.0 million.
On July 31, Virtus Investment reported second quarter 2012 earnings
per share of $1.04, topping the Zacks Consensus Estimate of 92
cents by 13.0% and significantly outpacing last year's earnings of
30 cents. The improved top line was partially offset by higher
Total revenue (adjusted basis) grew 36% year-over-year to $51.0
million. Operating expenses, on adjusted basis, were $31.9 million,
up 17% from 27.2 million in the prior-year quarter. Moreover,
operating income, as adjusted, came in at $19.2 million, up 85% on
As of June 30, 2012, assets under management (AUM) growth improved
17% from the year-ago quarter to $38.8 billion. The increase was a
result of continued strong sales and positive net flows from
long-term mutual funds, partly offset by market depreciation and
the early liquidation of a structured product in the quarter.
Earnings Momentum Rises
For 2012, two of three estimates have moved higher over the past 30
days, lifting the Zacks Consensus Estimate by 1.4% to $4.28 per
share. This implies year-over-year growth of 286.9%. For 2013, the
Zacks Consensus Estimate has advanced 3.2% to $5.73 with again two
upward revisions out of three, implying year-over-year growth of
Virtus Investment currently trades at 21.8x 12-month forward
earnings, a 41% premium to the peer group average of 15.5x. Its
price to book ratio of 3.2 is 58% above the peer group average of
Chart Shows Strength
Virtus Investment has witnessed strong price momentum since the
second quarter earnings release. Moreover, the company has been
continuously outperforming the S&P 500 this year while
outperforming its 200-day and 50-day moving averages over the last
three months. Over the last year, the stock has returned 55.8%,
compared with the S&P 500's return of 14.1%.
Headquartered in Hartford, Connecticut, Virtus Investment provides
investment management products and services to individuals and
institutions. The company started operations in November 1995
through a reverse merger with Duff & Phelps Corporation (
). With a market capital of about $729.2 million, Virtus Investment
competes with Waddell & Reed Financial Inc. (
) and AllianceBernstein Holding L.P. (
), among others.
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