Shares of Waddell & Reed Financial, Inc. (WDR - Analyst Report) hit a 52-week high, touching $69.80 within the first hour of the trading session on Feb 18. However, the stock closed the session at $69.41, which reflects a solid year-to-date return of 7.7%. The trading volume for the session was 500,450 shares.
Despite the strong price appreciation, this Zacks Rank #1 (Strong Buy) stock has plenty of upside left, given its strong estimate revisions over the last 30 days.
Impressive fourth-quarter 2013 results that included significant improvement in the top line and higher assets under management (AUM), along with impressive capital deployment activities were the primary growth drivers for Waddell & Reed.
On Feb 4, the company reported its fourth-quarter earnings of 92 cents per share, beating the Zacks Consensus Estimate by 12.2%. With this, the company has delivered positive earnings surprises in the trailing 4 quarters, with an average beat of 7.40%.
A year-over-year increase of 23.8% in operating revenues and 71.2% surge in gross sales were tailwinds for the quarter. Also, net inflows were $4.0 billion compared with net outflows of $165 million in the year-ago quarter.
Further, as of Dec 31, 2013, AUM totaled $126.5 billion, up 31.3% from $96.4 billion as of Dec 31, 2012. Additionally, in 2013, Waddell & Reed returned $168.2 million to shareholders in the form of dividends and share repurchases.
On the flip side, increased underwriting and distribution expenses, compensation and related costs as well as general and administrative costs pushed up expenses by 19.2% year over year.
Estimate Revisions Show Potency
Over the last 30 days, the Zacks Consensus Estimate for 2014 advanced 1.4% to $3.67 per share. Similarly, for 2015, it moved north by 3.2% to $4.23 per share, over the same time frame.
Some other Zacks Rank #1 stocks in the asset management sphere include Calamos Asset Management Inc. (CLMS - Snapshot Report), Lazard Ltd. (LAZ - Analyst Report) and Fortress Investment Group LLC (FIG - Snapshot Report).