WisdomTree Investments, Inc. (
) has witnessed solid upward earnings estimate revisions for 2012
and 2013 over the last 60 days. On October 26, this asset manager
and 7th largest ETF provider reported strong third-quarter results
and an impressive 50% earnings surprise. With a long-term sales
expected to grow 59.7%, this Zacks #1 Rank (Strong Buy) looks like
a solid aggressive growth pick.
Remarkable 3Q Results
WisdomTree Investments reported its third quarter earnings per
share of 3 cents, beating the Zacks Consensus Estimate by 50.0% and
the prior-year quarter's earnings by 200.0%. Robust results were
largely aided by augmented total revenue, partly offset by higher
Total revenue increased 22.1% year over year to a record $21.7
million, driven by higher ETF advisory fees. Yet, total operating
expenses escalated 4.8% from the prior-year quarter to $16.9
million. Elevated compensation and benefits expenses and higher
fund management and administration charges were the primary reasons
for the overall rise in total expenses.
As of September 30, 2012, ETF assets under management were $16.8
billion, up 50.1% from $11.2 billion recorded in the prior-year
quarter, aided by higher inflows and positive impact from market
Earnings Estimates Rise
The Zacks Consensus Estimate for 2012 rose 12.5% over the last 60
days to 9 cents per share as 5 of 6 estimates moved higher. For
2013, over the same time frame, the Zacks Consensus Estimate surged
8.7% to 25 cents with 6 out of 7 estimates moving up.
The Zacks Consensus Estimate for 2012 reflects year-over-year
growth of about 341.7%, while the expected growth rate for 2013 is
Growth Comes At A Price
The triple digit earnings growth doesn't come cheap. Shares
currently trade at 70.3x forward earnings, a significant premium to
the peer group average of 18.4x. Its price to book ratio of 17.4 is
also at a substantial premium to the industry median of 2.9.
However, WisdomTree Investments has a trailing 12-month ROE of
30.0%, compared with the peer group average of 10.2%. This implies
that the company reinvests its earnings more efficiently than its
Chart Shows Strength
The share price line of WisdomTree Investments is expected to
follow the continuously rising earnings estimate line.
Headquartered in New York, WisdomTree Investments conducts business
as an exchange-traded funds (
) sponsor and asset manager. Additionally, the company provides
investment advisory services. Founded in 1985, it has a market
capitalization of about $754.2 million.
WISDOMTREE INV (WETF): Free Stock Analysis
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