On Dec 23, 2014, we issued an updated research report on SEI Investments Co. (SEIC). Although this Oaks, PA-based asset management company remains focused on improving its revenues, persistently rising expenses remains a major concern.
SEI Investments has been witnessing strong revenue growth. Over the last 3 years (2001–2013), its top line recorded a CAGR of 10.1%, with this rising trend continuing through the first nine months of 2014 as well. Further, we believe that the company’s diversified product portfolio, along with its strong global presence, will help it maintain the revenue growth momentum in the upcoming quarters.
Moreover, assets inflows at SEI Investments remain robust. The company has registered an uptrend in its total assets under management and administration over the last few years. Though the overall equity market remains volatile, the company is well positioned to benefit from the same. Therefore, we expect asset inflows to continue making significant contribution to earnings growth.
However, mounting expenses remain a concern for the company. SEI Investments has been witnessing rising expenses over the past few years which continued in the first nine months of 2014 too. Also, as the company continues to build its operational infrastructure, we believe that costs are unlikely to decrease in the near term.
Analysts have remained neutral on SEI Investments’ future prospects. Over the last 30 days, the Zacks Consensus Estimate for both 2014 and 2015 remained stable at $1.86 per share and $2.13 per share, respectively.
SEI Investments currently carries a Zacks Rank #3 (Hold).
Stocks Worth Considering
Some better-ranked stocks in this space include BlackRock, Inc. (BLK), The Blackstone Group L.P. (BX) and Federated Investors, Inc. (FII). All these stocks carry a Zacks Rank #2 (Buy).
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