Shares of Ameriprise Financial, Inc. (AMP) hit a new 52-week high of $130.81 on Nov 11. However, the stock closed the session at $130.36, reflecting a solid return of 29.2% over the past one year. The trading volume for the session was 800,610 shares.
Despite the strong price appreciation, this Zacks Rank #3 (Hold) stock has plenty of upside left, given the positive estimate revisions it witnessed over the past 30 days. Further, long-term expected earnings per share growth rate for this investment management firm presently stands at 16.2%.
Growth Drivers
Impressive third-quarter 2014 results, including improvement in revenue and higher assets under management (AUM) and assets under administration, primarily drove the stock price.
On Oct 28, Ameriprise reported third-quarter adjusted operating earnings of $2.24 per share, beating the Zacks Consensus Estimate of $1.95. The reported figure was also 28% higher than the prior-year quarter figure.
For the quarter, net revenue came in at $2.9 billion, up 8% year over. This rise was due to net inflows from clients and market appreciation. Again, as of Sep 30, 2014, total AUM and assets under administration summed $797 billion, up 8% year over year. The increase came mainly on the back of advisor client net inflows and market appreciation.
Expenses of $2.3 billion in the quarter (up 5% year over year) was a drag. Higher distribution and general and administrative expenses mainly contributed to the mounting operating expenses.
Estimate Revisions Show Potency
Over the last 30 days, the Zacks Consensus Estimate for 2014 edged up 0.6% to $8.43. However, over the last 60 days, the Zacks Consensus Estimate for 2014 went slightly down. For 2015, over the last 30 and 60 days, the Estimate moved up around 1.7% and 0.6%, respectively, to $6.64 per share.
Some better-ranked investment managers include Monroe Capital Corporation (MRCC), Northstar Asset Management Group Inc. (NSAM) and Signature Group Holdings, Inc. (SGGH). All these stocks carry a Zacks Rank #2 (Buy).
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