Federated Investors Hits 52-Week High

Zacks

Shares of Federated Investors, Inc. (FII) achieved a new 52-week high, touching $31.20 on Mar 26. The stock closed the session at $30.45, reflecting a solid year-to-date return of 8.7%. The trading volume for the session was 1.7 million shares.

Despite the strong price appreciation, this Zacks Rank #3 (Hold) stock still has upside left, given the positive earnings surprises it delivered in the past two quarters. Further, the long-term expected earnings per share growth rate for this regional bank now stands at 8.0%

Growth Drivers

Recent acquisitions, global expansion and decent fourth-quarter results, including lower operating expenses and strong liquidity position, primarily drove the stock price.

On Mar 14, Federated Investors announced a deal to acquire fixed-income assets worth $421 million from Huntington Asset Advisors, Inc., an investment adviser subsidiary of The Huntington National Bank. The fixed-income assets of Huntington will be merged into five existing Federated fixed-income mutual funds.

On Jan 23, Federated Investors came out with fourth-quarter 2013 earnings of 39 cents per share, beating the Zacks Consensus Estimate by 8.3%.

Results were aided by a fairly liquid balance sheet, strong capital position, lower operating expenses and diversified asset as well as product mix.

However, a slight fall in assets under management and decline in the top line were the downsides. Moreover, net income including non-recurring items declined in the fourth quarter.

Some better-ranked stocks in this space include AllianceBernstein Holding L.P. (AB), Fortress Investment Group LLC (FIG) and Lazard Ltd. (LAZ). All of these sport a Zacks Rank #1 (Strong Buy).

To read this article on Zacks.com click here.

Get all Zacks Research Reports and be alerted to fast-breaking buy and sell opportunities every trading day.

Be the first to comment

Leave a Reply