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SEI Investments Troubled by Rising Expenses

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We issued an updated research report on SEI Investments Co. (SEIC - Free Report) on Jun 25, 2014. Mounting expenses remain as a major drag on the company’s profitability. Nevertheless, better-than-expected first-quarter results released on Apr 23 which included steady growth in top line was encouraging.

SEI Investment has been witnessing a persistent rise in expenses over the preceding few quarters. While in first quarter expenses were up 6%, it has grown at a CAGR of 10.0% over the last three years (2011-2013). As the company continues to build its operational infrastructure, costs are expected to surge further in the near term.

Moreover, the Zacks Consensus Estimate for 2014 decreased 1.2% to $1.68 per share over the last 60 days. For 2015, the Zacks Consensus Estimate declined 1.5% to $1.91 per share over the same time period.

However, SEI Investments has recorded consistent improvement in revenue in the past few years. Given the company’s diversified product and revenue mix as well as its strong global presence, we expect the trend to continue in the quarters ahead.

SEI Investments currently carries a Zacks Rank #4 (Sell).

Stocks That Warrant a Look

Some better-ranked investment managers include Woori Finance Holdings Co., Ltd. (WF - Free Report) , Ameriprise Financial, Inc. (AMP - Free Report) and BlackRock, Inc. (BLK - Free Report) . While Woori Finance sports a Zacks Rank #1 (Strong Buy), Ameriprise and BlackRock hold a Zacks Rank #2 (Buy).

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