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4 Reasons Why Artisan Partners (APAM) Stock is a Must-Buy Now

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It seems to be a wise option to add Artisan Partners Asset Management Inc. (APAM - Free Report) stock to your portfolio now. The company’s diverse investment strategies across multiple asset classes, and investments in new teams and operational capabilities may aid revenues in the upcoming period.

The Zacks Consensus Estimate for APAM’s current-year earnings has been revised marginally upward over the past week, reflecting analysts’ bullish sentiments regarding its earnings growth potential. Thus, the company currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Shares of APAM have gained 8.9% in the past six months against the 3.1% decline recorded by the industry.

 

Zacks Investment Research
Image Source: Zacks Investment Research

 

A few other favorable factors that make APAM an attractive investment option right now are mentioned below.

Earnings Growth: In the last three to five years, the company witnessed earnings per share (EPS) growth of 9.6%, higher than the industry’s rise of 7.8%. While its earnings are projected to decline 13.5% in 2023, the same is expected to rebound and grow to 9.5% in 2024.

Rising AUM: Artisan Partners’ total assets under management (AUM) have been witnessing improvement. Total AUM saw a four-year (2018-2022) compounded annual growth rate (CAGR) of 7.4%, with the rising trend continuing in first-quarter 2023. The company’s efforts to improve and add investment strategies supported AUM growth. Hence, as markets improve and the economy stabilizes, AUM will rise, thus aiding top-line growth.

Top-Line Strength: APAM’s revenue witnessed a CAGR of 4.6% over the last four years (ended 2022) with some volatility. Artisan Partners' diverse product offerings and investment strategies continue to attract investors. The same is expected to support revenue growth. The company maintains decent funds for operations and new products, and to continue investing in new teams, technological and operational capabilities. Such efforts are likely to boost revenues in the upcoming period.

Superior Return on Equity (ROE): The company’s ROE of 86.17% is higher than the industry average of 12.95%. This shows that it reinvests its cash more efficiently than its peers.

Other Stocks to Consider

A couple of other top-ranked stocks from the finance space are AssetMark Financial (AMK - Free Report) and BrightSphere Investment Group (BSIG - Free Report) . Both companies currently carry a Zacks Rank #2 (Buy).

Earnings estimates for AMK have been revised 2.2% upward for 2023 over the past 30 days. AMK’s share price has rallied 14.8% over the past six months.

BrightSphere Investment’s earnings estimates have been revised marginally upward for the current year over the past 30 days. In six months’ time, BSIG’s share price has increased 21.7%.

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