Positive earnings momentum on the back of strong second quarter
results -- including an earnings surprise of 100.0% -- helped
WisdomTree Investments, Inc.
) achieve a Zacks #1 Rank (Strong Buy) on October 5. With a solid
year-to-date return of 12%, this exchange-traded funds (ETFs)
sponsor and asset manager offers an attractive investment
WISDOMTREE INV (WETF): Free Stock Analysis
WILSHIRE BCP (WIBC): Free Stock Analysis Report
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The Rank Driver
WisdomTree Investments is expected to release its third quarter
earnings on October 24. The Zacks Consensus Estimate for the
quarter is 3 cents per share. The company reported in line results
in three of the last four quarters and surpassed in the other.
Better-than-expected second quarter earnings and decent ETF assets
position are the primary rank drivers for this stock.
WisdomTree Investments reported its second quarter results on July
27 with net income per share of 2 cents, beating the Zacks
Consensus Estimate as well as the prior-year quarter's earnings of
1 cent by 100.0%. Robust results for the reported quarter were
primarily aided by elevated total revenue which was attributed to
higher ETF advisory fees.
Total revenue increased 22.2% to $20.4 million from $16.7 million
in the year-ago quarter. However, on the downside, total operating
expenses escalated 8.8% on a year-over-year basis to $17.3 million.
Elevated compensation and benefits expenses and higher professional
and consulting fees primarily led to the overall rise in total
As of June 30, 2012, ETF assets under management were $15.0
billion, up 16.0% from $12.9 billion recorded in the prior-year
quarter, aided by higher inflows.
The Zacks Consensus Estimate for 2012 has remained stable at 8
cents per share over the last 90 days. The current estimate implies
a year-over-year growth of 285.7%. For 2013, over the same time
frame, the Zacks Consensus Estimate decreased 4.2% to 23 cents per
share, indicating a year-over-year growth of 194.4%.
WisdomTree Investments currently trades at a forward P/E of 87.4x,
at a significant premium to the peer group average of 15.8 x. On a
price-to-book basis, the shares are trading at 22.4x, at a
significant premium to the peer group average of 2.3x. Given the
company's strong fundamentals, the valuation looks reasonable.
WisdomTree Investments has a trailing 12-month ROE of 24.1%
compared with the peer group average of 9.6%.
About the Company
Headquartered in New York, WisdomTree Investments, Inc. conducts
business as an exchange-traded funds (ETFs) sponsor and asset
manager. Additionally, the company provides investment advisory
services. WisdomTree Investments, founded in 1985, has a market
capitalization of roughly $859.0 million.
Wilshire Bancorp Inc.
) is also a Zacks #1 Rank bank stock.