Though the current economic scenario has made investors wary of investing in stock markets, a few reasons suggest that it is a wise idea to buy Artisan Partners Asset Management Inc. (APAM - Free Report) stock now.
Over the past 60 days, the Zacks Consensus Estimate for the company’s current-year earnings has been revised 4.1% upward, which suggests that analysts are optimistic regarding its earnings growth potential. As a result, the company currently sports a Zacks Rank #1 (Strong Buy).
Looking at its price performance, shares of Artisan Partners have lost 37.6% so far this year, owing to the current economic slowdown, resulting from fears over the coronavirus outbreak. The industry to which the stock belongs has lost 32.1% over the same period.
However, driven by the company’s strong fundamentals and solid earnings growth prospects, its price performance is expected to improve in the future.
Key Driving Factors
Earnings per Share (EPS) Growth: Over the last three to five years, Artisan Partners witnessed EPS growth of 8.3%, higher than the industry average of 5.6%. Moreover, its earnings are projected to grow 13.5% in 2020 and 5.9% in 2021.
Its long-term (three-five years) estimated EPS growth rate of 8.6% promises reward for investors. Moreover, the company has a Growth Score of B. Our research shows that stocks, with the combination of a Growth Score of A or B and a Zacks Rank #1 or 2 (Buy), offer the best upside potential.
Revenue Strength: Artisan Partners continues to make steady progress toward improving its top line, which has witnessed a CAGR of 3.5% over the past four years (2016-2019). The company’s projected sales growth rate of 12.5% for 2020 and 5.3% for 2021 ensures the continuation of the upward trend in revenues.
Reasonable Valuation: The stock looks undervalued right now when compared with its broader industry. It currently has a price/earnings (P/E) (F1) ratio of 5.94, lower than the industry average of 6.73. Moreover, the stock has a Value Score of B. The Value Style Score condenses all valuation metrics into one actionable score, which helps investors steer clear of 'value traps' and identify stocks that are truly trading at a discount.
Other Stocks That Warrant a Look
A few other top-ranked stocks from the same space are mentioned below.
Cohen & Steers Inc.’s (CNS - Free Report) Zacks Consensus Estimate for current-year earnings has been revised upward by 4.9% over the past 60 days. The company currently sports a Zacks Rank #1.
T. Rowe Price Group, Inc. (TROW - Free Report) has witnessed an upward earnings estimate revision of 3.6% for the current year over the past 60 days. At present, the company carries a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank stocks here.
The consensus estimate for earnings of Focus Financial Partners Inc. (FOCS - Free Report) has been revised 5.1% upward for the current year over the past 60 days. The stock currently carries a Zacks Rank #2.
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