Shares of Invesco Ltd. (IVZ) hit a new 52-week high of $35.23 during the first half of the trading session on Nov 27. However, the stock closed the session at $35.03, which reflects a year-to-date return of 33.4%. The trading volume for the session was 4.3 million shares.
Despite the strong price appreciation, this Zacks Rank #2 (Buy) investment manager still has plenty of upside left, given its positive estimate revision over the last 30 days and the expected long term earnings growth of 14.7%.
Invesco’ impressive price performance was driven by an improvement in its preliminary month-end assets under management (:AUM) for Oct 2013 along with strong-third quarter 2013 results, which include a positive earnings surprise of 5.8%.
The AUM for October was $763.9 billion, up 2.5% from $745.5 billion at the end of Sep 2013. Favorable market returns and positive long-term net flows primarily aided the growth. As the equity market improves globally, we expect asset inflows to significantly contribute to Invesco’s earnings growth going forward.
On Oct 31, Invesco declared third-quarter earnings of 55 cents per share, which beat the Zacks Consensus Estimate by 3 cents. Better-than-expected results were driven by top-line growth, partially offset by higher expenses.
Invesco’s capital deployment activities seem lucrative as well. Though in the reported quarter the company did not repurchase shares, it authorized an additional $1.5 billion for the existing share repurchase program with no stated expiry date.
Estimate Revisions Show Potency
In the last 30 days, the Zacks Consensus Estimate for 2013 increased nearly 1% to $2.10 per share. For 2014, the Zacks Consensus Estimate advanced roughly by 1% to $2.44 per share over the same time frame.
Other investment mangers worth considering include GAMCO Investors, Inc. (GBL), Waddell & Reed Financial, Inc. (WDR) and Affiliated Managers Group Inc. (AMG). While GAMCO Investors and Waddell & Reed carry a Zacks Rank #1 (Strong Buy), Affiliated Managers holds the same Zacks Rank as Invesco.