Virtus Investment Partners, Inc.
(VRTS - Snapshot Report
) achieved a Zacks #1 Rank (Strong Buy) on October 16 and currently trades near its 52-week high. This asset management company is scheduled to report third-quarter results next week, having surpassed the Zacks Consensus Estimate by 13% in the second quarter. Moreover, VRTS has a solid return of 55.8% over the last year.
Q3 Results Coming Monday
Virtus Investment Partners is expected to release its third quarter results on October 29. The Zacks Consensus Estimate is calling for $1.23 per share on revenue of $71.0 million.
On July 31, Virtus Investment reported second quarter 2012 earnings per share of $1.04, topping the Zacks Consensus Estimate of 92 cents by 13.0% and significantly outpacing last years earnings of 30 cents. The improved top line was partially offset by higher operating expenses.
Total revenue (adjusted basis) grew 36% year-over-year to $51.0 million. Operating expenses, on adjusted basis, were $31.9 million, up 17% from 27.2 million in the prior-year quarter. Moreover, operating income, as adjusted, came in at $19.2 million, up 85% on year-over-year basis.
As of June 30, 2012, assets under management (AUM) growth improved 17% from the year-ago quarter to $38.8 billion. The increase was a result of continued strong sales and positive net flows from long-term mutual funds, partly offset by market depreciation and the early liquidation of a structured product in the quarter.
Earnings Momentum Rises
For 2012, two of three estimates have moved higher over the past 30 days, lifting the Zacks Consensus Estimate by 1.4% to $4.28 per share. This implies year-over-year growth of 286.9%. For 2013, the Zacks Consensus Estimate has advanced 3.2% to $5.73 with again two upward revisions out of three, implying year-over-year growth of 33.8%.
Virtus Investment currently trades at 21.8x 12-month forward earnings, a 41% premium to the peer group average of 15.5x. Its price to book ratio of 3.2 is 58% above the peer group average of 2.0.
Chart Shows Strength
Virtus Investment has witnessed strong price momentum since the second quarter earnings release. Moreover, the company has been continuously outperforming the S&P 500 this year while outperforming its 200-day and 50-day moving averages over the last three months. Over the last year, the stock has returned 55.8%, compared with the S&P 500s return of 14.1%.
Headquartered in Hartford, Connecticut, Virtus Investment provides investment management products and services to individuals and institutions. The company started operations in November 1995 through a reverse merger with Duff & Phelps Corporation (DUF). With a market capital of about $729.2 million, Virtus Investment competes with Waddell & Reed Financial Inc. (WDR) and AllianceBernstein Holding L.P. (AB), among others.
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