WisdomTree Investments, Inc. is scheduled to report fourth-quarter and full-year 2016 results on Feb 3, before the market opens.
Last quarter, this New York-based exchange traded fund (“ETF”) and exchange-traded product (“ETP”) sponsor reported earnings per share of 6 cents, in line with the Zacks Consensus Estimate. The company witnessed a decline in revenues due to lower assets under management (AUM), associated with the company’s two largest ETFs – WisdomTree Europe Hedged Equity Fund (HEDJ) and WisdomTree Japan Hedged Equity Fund (DXJ). However, expense control was on the positive side.
Notably, following the earnings release, shares of the company gained nearly 8.3% during the three months ended Dec 31, 2016.
However, WisdiomTree’s activities during the to-be-reported quarter were inadequate to win analysts’ confidence. As a result, the Zacks Consensus Estimate for the quarter remained stable over the last seven days.
Earnings Whispers
Our proven model cannot conclusively predict whether WisdiomTree will beat earnings estimates this time. That’s because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy) or at least 2 (Buy) or 3 (Hold) to have a significantly higher chance of beating estimates. This is not the case here, as elaborated below.
(You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.)
Zacks ESP: The Earnings ESP for WisdomTree is 0.00%. This is because the Most Accurate estimate matches the Zacks Consensus Estimate of 6 cents.
Zacks Rank: WisdomTree’s Zacks Rank #2 increases the predictive power of ESP. However, we also need to have a positive ESP to be confident of an earnings beat.
Factors at Play
The first three quarters of 2016 have been quite tough for WisdomTree as it was hit with significant outflows. The outflows were mostly driven by internationally hedged products, particularly the company’s major currency-hedged funds – HEDJ and DXJ – which constitute around 40% of the company’s AUM.
However, in the fourth quarter the company recorded inflows of approximately $0.1 billion. Though, DXJ witnessed inflows during the quarter, outflows in HEDJ reflect persistent weakness. Nevertheless, the company’s other hedged and unhedged international equity ETF may remain stable.
WisdomTree remains focused on executing its strategic growth initiatives, including expansion of distribution capabilities, investment in technology, launch of innovative products and addition of personnel. We expect such initiatives to increase marketing and sales expenses in the fourth quarter.
Considering the heightened volatility around flows, a key area to watch will be compensation expense level during the quarter. Management expects a compensation expense of 24–28% for the year.
Stocks that Warrant a Look
Here are some stocks worth considering, as they have the right combination of elements to post an earnings beat in their upcoming release.
Evercore Partners Inc. (EVR - Free Report) , a Zacks Rank #3 stock, has an Earnings ESP of +4.48%. It is scheduled to report results on Feb 1.
CNA Financial Corporation (CNA - Free Report) is scheduled to report results on Feb 6. The company has an Earnings ESP of +13.42% and sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
LPL Financial Holdings Inc. (LPLA - Free Report) is scheduled to report results on Feb 9. The company has an Earnings ESP of +2.78% and carries a Zacks Rank #2.
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WisdomTree Investments, Inc. is scheduled to report fourth-quarter and full-year 2016 results on Feb 3, before the market opens.
Last quarter, this New York-based exchange traded fund (“ETF”) and exchange-traded product (“ETP”) sponsor reported earnings per share of 6 cents, in line with the Zacks Consensus Estimate. The company witnessed a decline in revenues due to lower assets under management (AUM), associated with the company’s two largest ETFs – WisdomTree Europe Hedged Equity Fund (HEDJ) and WisdomTree Japan Hedged Equity Fund (DXJ). However, expense control was on the positive side.
Notably, following the earnings release, shares of the company gained nearly 8.3% during the three months ended Dec 31, 2016.
However, WisdiomTree’s activities during the to-be-reported quarter were inadequate to win analysts’ confidence. As a result, the Zacks Consensus Estimate for the quarter remained stable over the last seven days.
Earnings Whispers
Our proven model cannot conclusively predict whether WisdiomTree will beat earnings estimates this time. That’s because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy) or at least 2 (Buy) or 3 (Hold) to have a significantly higher chance of beating estimates. This is not the case here, as elaborated below.
(You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.)
Zacks ESP: The Earnings ESP for WisdomTree is 0.00%. This is because the Most Accurate estimate matches the Zacks Consensus Estimate of 6 cents.
Zacks Rank: WisdomTree’s Zacks Rank #2 increases the predictive power of ESP. However, we also need to have a positive ESP to be confident of an earnings beat.
Factors at Play
The first three quarters of 2016 have been quite tough for WisdomTree as it was hit with significant outflows. The outflows were mostly driven by internationally hedged products, particularly the company’s major currency-hedged funds – HEDJ and DXJ – which constitute around 40% of the company’s AUM.
However, in the fourth quarter the company recorded inflows of approximately $0.1 billion. Though, DXJ witnessed inflows during the quarter, outflows in HEDJ reflect persistent weakness. Nevertheless, the company’s other hedged and unhedged international equity ETF may remain stable.
WisdomTree remains focused on executing its strategic growth initiatives, including expansion of distribution capabilities, investment in technology, launch of innovative products and addition of personnel. We expect such initiatives to increase marketing and sales expenses in the fourth quarter.
Considering the heightened volatility around flows, a key area to watch will be compensation expense level during the quarter. Management expects a compensation expense of 24–28% for the year.
Stocks that Warrant a Look
Here are some stocks worth considering, as they have the right combination of elements to post an earnings beat in their upcoming release.
Evercore Partners Inc. (EVR - Free Report) , a Zacks Rank #3 stock, has an Earnings ESP of +4.48%. It is scheduled to report results on Feb 1.
CNA Financial Corporation (CNA - Free Report) is scheduled to report results on Feb 6. The company has an Earnings ESP of +13.42% and sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
LPL Financial Holdings Inc. (LPLA - Free Report) is scheduled to report results on Feb 9. The company has an Earnings ESP of +2.78% and carries a Zacks Rank #2.
Zacks' Top 10 Stocks for 2017
In addition to the stocks discussed above, would you like to know about our 10 finest tickers for the entirety of 2017?
Who wouldn't? These 10 are painstakingly hand-picked from 4,400 companies covered by the Zacks Rank. They are our primary picks to buy and hold. Be among the very first to see them >>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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