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.
Here's Why You Should Hold On to Invesco (IVZ) Stock Now
Read MoreHide Full Article
Invesco Ltd. (IVZ - Free Report) has been witnessing steady revenue growth and a continued increase in assets under management (AUM) balance. However, escalating expenses and high debt levels are major near-term concerns.
Invesco’s top-line growth looks impressive. Net revenues witnessed a six-year (2014-2019) CAGR of 4.1%, with the momentum continuing in first-half 2020. This was mainly driven by the company’s solid AUM balance and the OppenheimerFunds buyout. Given a robust institutional pipeline, solid retail channel and synergies from opportunistic acquisitions, revenues will continue to grow in the quarters ahead.
Further, Invesco has been witnessing a continued rise in its AUM balance. Though total AUM declined in 2018 and in the first six months of 2020 on market volatility, the same witnessed a CAGR of 9.1% over the last six years (2014-2019). The acquisition of OppenheimerFunds resulted in a rise in Invesco’s AUM, making it one of the leading global asset managers.
However, Invesco’s operating expenses have escalated at a four-year (2016-2019) CAGR of 14%, with the trend continuing in the first two quarters of 2020 as well. Rise in compensation costs are the primary reasons for this upswing. Operating expenses are likely to keep rising in the upcoming quarters, given the company’s inorganic growth initiatives and investment in franchise.
Moreover, the company’s high debt level is a concern. As of Jun 30, 2020, Invesco had total debt of $8.7 billion, which is significantly higher than the cash and cash equivalents balance of $1.3 billion. Further, its times-interest-earned ratio has been declining for the past few quarters. Such high debt levels can put the company in a relatively disadvantageous position if the economic situation worsens.
Further, the Zacks Consensus Estimate for 2020 and 2021 earnings has been revised 2.5% and marginally downward, respectively, over the past month. Also, shares of this Zacks Rank #3 (Hold) company have depreciated 40.6% in the year so far compared with the 2% decline recorded by the industry.
Stocks to Consider
Artisan Partners Asset Management Inc. (APAM - Free Report) witnessed an upward earnings estimate revision of 15.4% for 2020 over the past 30 days. Its shares have gained 41.4% in a year’s time. At present, it sports a Zacks Rank of 1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
BrightSphere Investment Group Inc. (BSIG - Free Report) recorded an upward earnings estimate revision of 4.5% for the current year in the past month. Its shares have appreciated 54.4% over the past year. It currently flaunts a Zacks Rank of 1.
Virtus Investment Partners, Inc. (VRTS - Free Report) witnessed an upward earnings estimate revision of 7.2% for 2020 over the past 30 days. Its shares have gained 40.1% over the past year. At present, it sports a Zacks Rank of 1.
5 Stocks Set to Double
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
Image: Bigstock
Here's Why You Should Hold On to Invesco (IVZ) Stock Now
Invesco Ltd. (IVZ - Free Report) has been witnessing steady revenue growth and a continued increase in assets under management (AUM) balance. However, escalating expenses and high debt levels are major near-term concerns.
Invesco’s top-line growth looks impressive. Net revenues witnessed a six-year (2014-2019) CAGR of 4.1%, with the momentum continuing in first-half 2020. This was mainly driven by the company’s solid AUM balance and the OppenheimerFunds buyout. Given a robust institutional pipeline, solid retail channel and synergies from opportunistic acquisitions, revenues will continue to grow in the quarters ahead.
Further, Invesco has been witnessing a continued rise in its AUM balance. Though total AUM declined in 2018 and in the first six months of 2020 on market volatility, the same witnessed a CAGR of 9.1% over the last six years (2014-2019). The acquisition of OppenheimerFunds resulted in a rise in Invesco’s AUM, making it one of the leading global asset managers.
However, Invesco’s operating expenses have escalated at a four-year (2016-2019) CAGR of 14%, with the trend continuing in the first two quarters of 2020 as well. Rise in compensation costs are the primary reasons for this upswing. Operating expenses are likely to keep rising in the upcoming quarters, given the company’s inorganic growth initiatives and investment in franchise.
Moreover, the company’s high debt level is a concern. As of Jun 30, 2020, Invesco had total debt of $8.7 billion, which is significantly higher than the cash and cash equivalents balance of $1.3 billion. Further, its times-interest-earned ratio has been declining for the past few quarters. Such high debt levels can put the company in a relatively disadvantageous position if the economic situation worsens.
Further, the Zacks Consensus Estimate for 2020 and 2021 earnings has been revised 2.5% and marginally downward, respectively, over the past month. Also, shares of this Zacks Rank #3 (Hold) company have depreciated 40.6% in the year so far compared with the 2% decline recorded by the industry.
Stocks to Consider
Artisan Partners Asset Management Inc. (APAM - Free Report) witnessed an upward earnings estimate revision of 15.4% for 2020 over the past 30 days. Its shares have gained 41.4% in a year’s time. At present, it sports a Zacks Rank of 1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
BrightSphere Investment Group Inc. (BSIG - Free Report) recorded an upward earnings estimate revision of 4.5% for the current year in the past month. Its shares have appreciated 54.4% over the past year. It currently flaunts a Zacks Rank of 1.
Virtus Investment Partners, Inc. (VRTS - Free Report) witnessed an upward earnings estimate revision of 7.2% for 2020 over the past 30 days. Its shares have gained 40.1% over the past year. At present, it sports a Zacks Rank of 1.
5 Stocks Set to Double
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
Today, See These 5 Potential Home Runs >>