On May 22, Zacks Investment Research upgraded Noah Holdings Limited ( NOAH ) to Zacks Rank #1 (Strong Buy).
Why the Upgrade?
Noah Holdings has been witnessing rising earnings estimates owing to robust first-quarter 2013 results (released on May 6). Moreover, this Shanghai-based asset manager delivered positive earnings surprises in 3 of the last 4 quarters with an average beat of 37.9%.
First quarter earnings per share came in at 17 cents, surpassing the year-ago number by 240.0% and the Zacks Consensus Estimate by 112.5%. Results were primarily aided by better revenues and increased other income, partially offset by a rise in expenses. The company witnessed a higher number of registered clients during the quarter.
Total revenues jumped 94.3% from the prior-year quarter to $34.5 million. Other income was $1.8 million, up 50.6% year over year, mainly attributable to higher investment income. Investment income rose 113.6% to $1.1 million but interest income fell 8.4% to 0.7 million. Total operating cost and expenses increased 46.5% year over year to $20.7 million.
The aggregate value of wealth management products distributed by the company during the reported quarter was approximately $1.4 billion, increasing 63.1% from the prior-year period. Of this, fixed income products constituted 74.9%, private equity fund products 18.8%, and other products - including mutual fund products, private securities investment funds and investment-linked insurance products - 6.3%. The average transaction value per client in the first quarter of 2013 was about $0.8 million, decreasing 12.7% from the prior-year quarter.
The Zacks Consensus Estimate for 2013 increased 44.4% to 65 cents per share based on a single upward estimate revision over the last 30 days. For 2014, over the same time frame, the Zacks Consensus Estimate rose by 92.5% to 77 cents per share.
Other Stocks to Consider
Other well performing stocks in the same sector include Meta Financial Group, Inc. ( CASH ), Provident Financial Holdings, Inc. ( PROV ) and Great Southern Bancorp Inc. ( GSBC ), all of which carry the same Zacks rank as Noah Holdings.