Waddell & Reed Crafts 52-Week High - Analyst Blog

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Shares of Waddell & Reed Financial, Inc. ( WDR ) soared to a new 52-week high of $66.24 at the end of the trading session on Jan 3. However, the stock closed the session at $66.05, which reflects a solid return of 88.8% over the last one year. The trading volume for the session was 697,749 shares.

Despite the strong price appreciation, this Zacks Rank #1 (Strong Buy) investment manager has plenty of upside left, given its positive estimate revision over the last 60 days and the expected long-term earnings growth of 18.1%.

Growth Drivers

Waddell & Reed's impressive performance was driven by its efficient capital deployment activities and strong third-quarter 2013 results comprising a positive earnings surprise of 11.1%.

In Dec 2013, Waddell & Reed hiked the quarterly cash dividend on its Class A common stock by 21% from the prior payout to 34 cents. The dividend will be paid on Feb 3 to shareholders of record as of Jan 13.

Waddell & Reed's impressive dividend payouts and share buybacks make it an attractive pick for yield-seeking investors. Even during the financial crisis, when many banks and investment managers slashed or discontinued dividend payments, Waddell & Reed not only continued with its disbursement but managed to increase it as well.

On Oct 29, Waddell & Reed declared third-quarter earnings of 80 cents per share, which beat the Zacks Consensus Estimate of 72 cents. Robust results were driven by top-line growth, partially offset by higher operating expenses.

Moreover, Waddell & Reed delivered positive earnings surprises in the last 4 quarters with an average beat of 5.6%.

Estimate Revisions Show Potency

In the last 60 days, the Zacks Consensus Estimate for 2013 increased nearly 1.8% to $2.82 per share. For 2014, the Zacks Consensus Estimate advanced roughly 2.9% to $3.51 per share over the same time frame.

Other investment managers worth considering include Affiliated Managers Group Inc. ( AMG ), Ameriprise Financial, Inc. ( AMP ) and Artisan Partners Asset Management Inc. ( APAM ). All these stocks have a Zacks Rank #2 (Buy).



AFFIL MANAGERS (AMG): Free Stock Analysis Report

AMERIPRISE FINL (AMP): Free Stock Analysis Report

ARTISAN PTNR AM (APAM): 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 The NASDAQ OMX Group, Inc.



This article appears in: Investing , Business , Stocks

Referenced Stocks: AMG , AMP , APAM , WDR

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