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Analyst Blog

Shares of Affiliated Managers Group Inc. (AMG - Analyst Report) touched a new 52-week high of $170.40 during its trading session on Jun 13. This represents an increase over the previous high of $168.92 reached on May 22.  

Affiliated Managers closed trading on Jun 13 at $169.85, reflecting a solid year-to-date return of 67.6%. The trading volume for the session was 0.4 million shares. Further upside potential exists for this Zacks Rank #3 (Hold) assets management company as can be deduced from its earnings estimate revisions in the last 60 days and expected earnings growth of 21.9% for 2013.

Growth Drivers

Affiliated Managers reported impressive financial results for the first quarter of 2013 on Apr 30. Earnings per share came in at $2.27, up 43.7% year over year and 12.4% above the Zacks Consensus Estimate of $2.02.   

Net earnings outperformance was driven by roughly a 20% increase in revenue, led by rising product demand. Growth of 7% in Assets Under Management as well as a significant increase in cash flow from operating activities also proved beneficial for the company.  

Additionally, Affiliated Managers posted positive earnings surprise in all of the four trailing quarters with an average of 5.0%. This, along with impressive quarter results, has raised optimism for a better performance ahead. We currently have an Earnings ESP (Read: Zacks Earnings ESP: A Better Method) of +3.8% for 2013 and +4.6% for 2014.

Estimate Revisions Show Potency

Over the last 60 days, the Zacks Consensus Estimate for Affiliated Managers increased by 0.1% to $9.40 per share for 2013 and grew by 0.9% to $10.87 for 2014.

Other stocks to watch out for in the industry are Artisan Partners Asset Management Inc. (APAM - Snapshot Report), Noah Holdings Limited and Virtus Investment Partners, Inc. (VRTS - Snapshot Report), each with a Zacks Rank #1 (Strong Buy).
 

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