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Here's Why Waddell & Reed (WDR) Stock is Worth Betting On Now
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Amid the coronavirus pandemic, it seems to be a wise idea to add Waddell & Reed Financial, Inc. stock to your portfolio now, given its underlying strength and solid growth prospects. The company has been undertaking several efforts to improve efficiency and optimize operations.
Also, Waddell & Reed’s focus on the Retail Broker-Dealer channel, by providing additional support to its advisors through training opportunities and enhanced technology tools, will boost revenues and assets under management (AUM), in the days to come.
Further, the company’s Zacks Consensus Estimate for the current-year and next-year earnings has moved upward over the past 30 days, respectively, reflecting analysts’ optimism regarding its earnings growth potential. Thus, the stock currently carries a Zacks Rank #2 (Buy).
Shares of Waddell & Reed have lost 18.3% in the past six months compared with the industry’s fall of 11.7%.
Why is Waddell & Reed a Golden Egg?
Prudent Expense Management: Waddell & Reed is undertaking efforts to manage expenses. For this, the company is outsourcing transfer agency transactional processing operations and taking several other measures. These initiatives have started bearing fruit as operating expenses declined in 2019, after increasing in 2018, on a year-over-year basis. Notably, the same was relatively stable in first-quarter 2020.
Strong leverage: Waddell & Reed’s debt/equity ratio is 0.00 compared with the industry average of 0.21, displaying no debt burden relative to the industry. It highlights the financial stability of the company even in an unstable economic environment.
Superior Return on Equity (ROE): Waddell & Reed’s trailing 12-month ROE reflects its superiority in terms of utilizing shareholder funds compared with the peers. The company has an ROE of 15.01%, higher than the industry average of 12.36%.
Stock seems undervalued: With respect to the price/sales and price/book ratios, Waddell & Reed seems undervalued. It has a P/S ratio of 0.82 and a P/B ratio of 1.15, both falling below the respective industry averages of 1.80 and 1.21.
Also, the stock has a Value Score of B. The Value Style Score condenses all valuation metrics into one actionable score that helps investors steer clear of ‘value traps’ and identify stocks that are truly trading at a discount. Our research shows that stocks with the combination of a Style Score of A or B, and carrying a Zacks Rank #1 or 2 (Buy), offer the best upside potential.
Other Stocks to Consider
Tradeweb Markets Inc (TW - Free Report) has witnessed upward earnings estimate revisions for 2020 over the past 30 days. Moreover, this Zacks #1 Ranked stock has gained 35.6% over the past six months. You can see the complete list of today’s Zacks #1 Rank stocks here.
GAIN Capital Holdings, Inc.’s current-year earnings estimate moved north in 30 days’ time. Further, the company’s shares have surged 51.9% over the past six months. At present, it sports a Zacks Rank of 1.
New York Community Bancorp, Inc. (NYCB - Free Report) has witnessed upward earnings estimate revision for the ongoing year in the past 30 days. This Zacks #2 Ranked stock has depreciated 21.5% over the past six months.
Today's Best Stocks from Zacks
Would you like to see the updated picks from our best market-beating strategies? From 2017 through 2019, while the S&P 500 gained and impressive +53.6%, five of our strategies returned +65.8%, +97.1%, +118.0%, +175.7% and even +186.7%.
This outperformance has not just been a recent phenomenon. From 2000 – 2019, while the S&P averaged +6.0% per year, our top strategies averaged up to +54.7% per year.
Image: Bigstock
Here's Why Waddell & Reed (WDR) Stock is Worth Betting On Now
Amid the coronavirus pandemic, it seems to be a wise idea to add Waddell & Reed Financial, Inc. stock to your portfolio now, given its underlying strength and solid growth prospects. The company has been undertaking several efforts to improve efficiency and optimize operations.
Also, Waddell & Reed’s focus on the Retail Broker-Dealer channel, by providing additional support to its advisors through training opportunities and enhanced technology tools, will boost revenues and assets under management (AUM), in the days to come.
Further, the company’s Zacks Consensus Estimate for the current-year and next-year earnings has moved upward over the past 30 days, respectively, reflecting analysts’ optimism regarding its earnings growth potential. Thus, the stock currently carries a Zacks Rank #2 (Buy).
Shares of Waddell & Reed have lost 18.3% in the past six months compared with the industry’s fall of 11.7%.
Why is Waddell & Reed a Golden Egg?
Prudent Expense Management: Waddell & Reed is undertaking efforts to manage expenses. For this, the company is outsourcing transfer agency transactional processing operations and taking several other measures. These initiatives have started bearing fruit as operating expenses declined in 2019, after increasing in 2018, on a year-over-year basis. Notably, the same was relatively stable in first-quarter 2020.
Strong leverage: Waddell & Reed’s debt/equity ratio is 0.00 compared with the industry average of 0.21, displaying no debt burden relative to the industry. It highlights the financial stability of the company even in an unstable economic environment.
Superior Return on Equity (ROE): Waddell & Reed’s trailing 12-month ROE reflects its superiority in terms of utilizing shareholder funds compared with the peers. The company has an ROE of 15.01%, higher than the industry average of 12.36%.
Stock seems undervalued: With respect to the price/sales and price/book ratios, Waddell & Reed seems undervalued. It has a P/S ratio of 0.82 and a P/B ratio of 1.15, both falling below the respective industry averages of 1.80 and 1.21.
Also, the stock has a Value Score of B. The Value Style Score condenses all valuation metrics into one actionable score that helps investors steer clear of ‘value traps’ and identify stocks that are truly trading at a discount. Our research shows that stocks with the combination of a Style Score of A or B, and carrying a Zacks Rank #1 or 2 (Buy), offer the best upside potential.
Other Stocks to Consider
Tradeweb Markets Inc (TW - Free Report) has witnessed upward earnings estimate revisions for 2020 over the past 30 days. Moreover, this Zacks #1 Ranked stock has gained 35.6% over the past six months. You can see the complete list of today’s Zacks #1 Rank stocks here.
GAIN Capital Holdings, Inc.’s current-year earnings estimate moved north in 30 days’ time. Further, the company’s shares have surged 51.9% over the past six months. At present, it sports a Zacks Rank of 1.
New York Community Bancorp, Inc. (NYCB - Free Report) has witnessed upward earnings estimate revision for the ongoing year in the past 30 days. This Zacks #2 Ranked stock has depreciated 21.5% over the past six months.
Today's Best Stocks from Zacks
Would you like to see the updated picks from our best market-beating strategies? From 2017 through 2019, while the S&P 500 gained and impressive +53.6%, five of our strategies returned +65.8%, +97.1%, +118.0%, +175.7% and even +186.7%.
This outperformance has not just been a recent phenomenon. From 2000 – 2019, while the S&P averaged +6.0% per year, our top strategies averaged up to +54.7% per year.
See their latest picks free >>