Back to top

Analyst Blog

Shares of Waddell & Reed Financial Inc. (WDR - Analyst Report) achieved a new 52-week high, touching $44.84 in the second half of the trading session on May 13. The closing price of this investment management stock reflected a solid year-to-date return of 25.4%. The trading volume for the session was 0.6 million shares.

Notably, this Zacks Rank #2 (Buy) stock still has plenty of upside left, given its strong estimate revisions over the last 30 days and expected year-over-year earnings growth of 17.8% for 2013.

Growth Drivers

Impressive first-quarter 2013 results – including an earnings surprise of 1.6% as well as improving assets under management (AUM) and a solid balance sheet – along with steady share repurchase activity were the primary growth drivers for Waddell & Reed.

On Apr 23, Waddell & Reed reported first-quarter 2013 earnings of 63 cents per share, outpacing the Zacks Consensus Estimate by a penny and the prior-quarter earnings of 55 cents. Better-than-expected results came on the back of improvement in top line, partially offset by an increase in operating expenses.

As of Mar 31, 2013, AUM totaled $103.8 billion, up 10.7% from $93.8 billion as of Mar 31, 2012.

Estimate Revisions Show Strength

For Waddell & Reed, over the last 30 days, 4 of the 10 estimates for 2013 have been revised upward, raising the Zacks Consensus Estimate by 2.3% to $2.70 per share. For 2014, 6 of the 10 estimates moved north, helping the Zacks Consensus Estimate move up 2.7% to $3.08 per share.

Better performing asset management stocks include AllianceBernstein Holding L.P. (AB - Snapshot Report), Invesco Ltd. (IVZ - Analyst Report) and Virtus Investment Partners, Inc. (VRTS - Snapshot Report), all of which carry a Zacks Rank #1 (Strong Buy).

Please login to Zacks.com or register to post a comment.