Waddell & Reed Financial, Inc.
) crafted a new 52-week high, touching $74.33 during the trading
session on Mar 13. However, the stock, which is in the investment
management space, closed the session at $72.01, reflecting a
solid return of 71.0% in a year's time. The trading volume for
the session was 647,478 shares.
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Despite hitting its 52-week high, this Zacks Rank #3 (Hold) stock
has plenty of upside left, given the strong estimate revisions it
witnessed over the last 60 days. Further, the long-term expected
EPS growth rate now stands at 19.2%.
Impressive fourth-quarter 2013 results, including significant
improvement in the top line, increased assets under management
(AUM) and efficient capital deployment activities were the
primary growth drivers for Waddell & Reed.
On Feb 4, Waddell & Reed reported its fourth-quarter 2013
earnings of 92 cents per share, beating the Zacks Consensus
Estimate by 12.2%. Further, results came in well ahead of the
prior-year quarter earnings of 61 cents.
Notably, with this, the company has delivered positive earnings
surprises in all the 4 quarters of 2013, with an average beat of
Operating revenues were up 23.8% year over year. Sales in all the
channels - Advisors, Wholesale and Institutional - witnessed a
rise, which led gross sales surge 71.2% year over year.
Further, net inflows were $4.0 billion compared with net outflows
of $165 million in the year-ago quarter. As of Dec 31, 2013, AUM
totaled $126.5 billion, up 31.3% from $96.4 billion as of Dec 31,
2012. Additionally, in 2013, Waddell & Reed returned $168.2
million to shareholders in the form of dividends and share
On the downside, increased underwriting and distribution
expenses, compensation and related costs as well as general and
administrative costs pushed up expenses by 19.2% year over year.
Estimate Revisions Show Potency
Over the last 60 days, the Zacks Consensus Estimate for 2014
advanced 1.4% to $3.67 per share. Also, for 2015, it moved north
around 7% to $4.24 per share.
Some other stocks in this space worth considering include
Calamos Asset Management Inc.
Fortress Investment Group LLC
). All these companies carry a Zacks Rank #1 (Strong Buy).