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Ladenburg Thalmann Upped to Strong Buy

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On Nov 14, 2013, Zacks Investment Research upgraded Ladenburg Thalmann Financial Services Inc. (LTS - Free Report) to a Zacks Rank #1 (Strong Buy).

Rationale Behind the Upgrade

Ladenburg Thalmann has witnessed positive estimate revision following the announcement of third-quarter 2013 results. Further, the company’s expected long-term earnings growth rate is 15.0%.

Ladenburg Thalmann reported third-quarter 2013 results on Nov 6. The company broke even as compared with the prior-year quarter net loss of 6 cents per share. Moreover, the company delivered a positive earnings surprise of 100%. Better-than-expected results were primarily driven by top-line growth, partially offset by higher operating expenses.

Total revenue was $220.5 million, up 25.4% from prior-year quarter. Net income was $2.4 million versus a loss of $6.0 million in third-quarter 2012. Both the reported and prior-year quarter figures include one-time expenditures related to depreciation, amortization and compensation.

Ladenburg Thalmann’s capital deployment activities in the form of steady share buybacks look attractive. From Jan 1, 2013 to Sep 30, 2013, the company has repurchased 3.6 million shares at an average price of $1.66. The figure includes buybacks outside the company’s share repurchase program. Moreover, approximately 4.0 million shares are yet to be purchased under the present share repurchase program.

During the last 30 days, the Zacks Consensus Estimate for 2013 improved to a loss of 4 cents from a loss of 7 cents per share. For 2014, the Zacks Consensus Estimate advanced significantly by 300% to earnings of 4 cents per share over the same time period.

Other Stocks to Consider

Apart from Ladenburg Thalmann, other investment managers worth considering include Evercore Partners Inc. (EVR - Free Report) , Interactive Brokers Group, Inc. (IBKR - Free Report) and Investment Technology Group Inc. (ITG - Free Report) . All these stocks carry a Zacks Rank #2 (Buy).

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