Markets

RCS Capital Upgraded to Strong Buy on Acquisition Strength - Analyst Blog

An image of a tablet with a stock chart on the display
Credit: Shutterstock photo

On Aug 19, Zacks Investment Research upgraded RCS Capital Corporation ( RCAP ) to a Zacks Rank #1 (Strong Buy).

Why the Upgrade?

The rank upgrade of this New York-based investment brokerage firm was driven by strong estimate revisions on the back of the recent acquisition announcements and impressive second-quarter 2014 results. Recent acquisition activities of the company reflect that it is on an expansion mode.

On Aug 13, RCS Capital announced the inking of a deal to acquire California-based independent broker-dealer - Girard Securities, Inc. Girard's assets under administration stand at more than $10 billion. Management expects the deal to boost RCS Capital's revenues.

On Aug 6, RCS Capital announced another confirmed deal to acquire Kansas-based VSR Group, Inc. along with its wholly-owned subsidiary - VSR Financial Services, Inc. VSR Group has more than $12.3 billion of assets under administration.

Both the acquisition deals are expected to be completed in late 2014 or early 2015. The deals, which form a part of RCS Capital's strategic acquisitions in independent broker-dealer space, pave the way for its expansion in the financial services platform. Upon completion of both the deals, the company's nationwide network will include more than 9,700 independent retail advisors.

Further, on Aug 7, RCS Capital released its second-quarter 2014 results. Adjusted net income came in at $42.6 million or 49 cents per share compared with $38.0 million or 44 cents per share in the prior quarter.

Also, in its second-quarter earnings release, RCS Capital stated that it completed five retail broker-dealer acquisitions that were announced previously. The company expects incremental revenue and cost synergies from these acquisitions in 2015.

The Zacks Consensus Estimate for 2014 advanced 7.4% to $2.18 per share over the past 30 days. Also, for 2015, it moved north 4.5% to $2.11 per share.

Other Stocks to Consider

Other stocks in the finance sector worth considering include Select Bancorp, Inc. ( SLCT ), Piper Jaffray Companies ( PJC ) and Home Loan Servicing Solutions, Ltd. ( HLSS ). All three stocks hold the same rank as RCS Capital.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

HOME LOAN SERVC (HLSS): Free Stock Analysis Report

PIPER JAFFRAY (PJC): Free Stock Analysis Report

RCS CAPITAL CP (RCAP): Free Stock Analysis Report

SELECT BANCORP (SLCT): Get Free Report

To read this article on Zacks.com click here.

Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

In This Story

SLCT

Other Topics

Stocks

Latest Markets Videos

    Zacks

    Zacks is the leading investment research firm focusing on stock research, analysis and recommendations. In 1978, our founder discovered the power of earnings estimate revisions to enable profitable investment decisions. Today, that discovery is still the heart of the Zacks Rank. A wealth of resources for individual investors is available at www.zacks.com.

    Learn More