We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Why Should You Sell SEI Investments (SEIC) Stock Now?
Read MoreHide Full Article
On Aug 29, 2016, we issued an updated research report on SEI Investments Co. (SEIC - Free Report) .
This asset management company enjoys a diversified revenue stream as well as a strong global presence driven by robust asset inflows and a broad client base. Hence, its revenues have grown at a CAGR of 8.2% over the past six years (2010-2015).
However, given the nature of its business, almost 75% of SEI Investments’ revenue is fee based. This type of income is largely affected by market fluctuations and foreign exchange translations. Therefore, amid the current weakness and uncertainty in global economy, the company exhibits soft revenue growth for the remainder of the year.
Further, rising expenses is another major concern for SEI Investments. Expenses increased at a CAGR of 7.7% over the last four years (2012–2015), with the same trend persisting in the first half of 2016. Additionally, management expects R&D expenses to grow nearly 12% of revenues by the end of 2016 and through 2017. So driven by this rise and expected increase in other costs, total expenses are anticipated to increase 4–6% sequentially in each of the next two quarters from the second-quarter 2016 level.
Stock Performance
The stock has performed rather unimpressively so far in 2016. It has tanked more than 12% year-to-date.
Also, the stock’s value ratios indicate that it is considerably overvalued relative to peers. Notably, the stock currently has a price-to-earnings ratio of 23.85 compared with the industry average of just 12.40, reflecting almost 100% premium. Further, with a price-to-book value ratio of 5.81, the stock is trading at a substantial premium to the industry average of just 1.56.
Negative Estimate Revisions
Additionally, driven by mounting expenses and soft top-line growth, analysts are bearish on SEI Investments. The Zacks Consensus Estimate has declined 4.9% and 8.1% for 2016 and 2017, respectively, over the last 60 days.
SEI Investments currently has a Zacks Rank #5 (Strong Sell).
Stocks Worth a Look
Some stocks in the same industry worth considering include Eaton Vance Corp. (EV - Free Report) , Federated Investors, Inc. and Fifth Street Asset Management Inc. . All these stocks hold a Zacks Rank #2 (Buy).
Confidential from Zacks
Beyond this Analyst Blog, would you like to see Zacks' best recommendations that are not available to the public? Our Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand. Click to see them now>>
Unique Zacks Analysis of Your Chosen Ticker
Pick one free report - opportunity may be withdrawn at any time
Image: Bigstock
Why Should You Sell SEI Investments (SEIC) Stock Now?
On Aug 29, 2016, we issued an updated research report on SEI Investments Co. (SEIC - Free Report) .
This asset management company enjoys a diversified revenue stream as well as a strong global presence driven by robust asset inflows and a broad client base. Hence, its revenues have grown at a CAGR of 8.2% over the past six years (2010-2015).
However, given the nature of its business, almost 75% of SEI Investments’ revenue is fee based. This type of income is largely affected by market fluctuations and foreign exchange translations. Therefore, amid the current weakness and uncertainty in global economy, the company exhibits soft revenue growth for the remainder of the year.
Further, rising expenses is another major concern for SEI Investments. Expenses increased at a CAGR of 7.7% over the last four years (2012–2015), with the same trend persisting in the first half of 2016. Additionally, management expects R&D expenses to grow nearly 12% of revenues by the end of 2016 and through 2017. So driven by this rise and expected increase in other costs, total expenses are anticipated to increase 4–6% sequentially in each of the next two quarters from the second-quarter 2016 level.
Stock Performance
The stock has performed rather unimpressively so far in 2016. It has tanked more than 12% year-to-date.
SEI INVESTMENTS Price
SEI INVESTMENTS Price | SEI INVESTMENTS Quote
Also, the stock’s value ratios indicate that it is considerably overvalued relative to peers. Notably, the stock currently has a price-to-earnings ratio of 23.85 compared with the industry average of just 12.40, reflecting almost 100% premium. Further, with a price-to-book value ratio of 5.81, the stock is trading at a substantial premium to the industry average of just 1.56.
Negative Estimate Revisions
Additionally, driven by mounting expenses and soft top-line growth, analysts are bearish on SEI Investments. The Zacks Consensus Estimate has declined 4.9% and 8.1% for 2016 and 2017, respectively, over the last 60 days.
SEI Investments currently has a Zacks Rank #5 (Strong Sell).
Stocks Worth a Look
Some stocks in the same industry worth considering include Eaton Vance Corp. (EV - Free Report) , Federated Investors, Inc. and Fifth Street Asset Management Inc. . All these stocks hold a Zacks Rank #2 (Buy).
Confidential from Zacks
Beyond this Analyst Blog, would you like to see Zacks' best recommendations that are not available to the public? Our Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand. Click to see them now>>