Investment Technology Upped to Strong Buy


On Jan 7, Zacks Investment Research upgraded Investment Technology Group Inc. (ITG) to a Zacks Rank #1 (Strong Buy).

Why the Upgrade?

Investment Technology has witnessed positive estimate revisions on the back of modest Nov 2013 trading activity and strong third-quarter 2013 results. Further, the company has delivered positive earnings surprises in the last 4 quarters with an average beat of 54.6%. Moreover, the long-term expected earnings growth rate for this stock is 10.0%.

On Dec 9, Investment Technology declared trading metrics for the month of November. Trading volume stood at 3.0 billion shares while average daily volume (:ADV) was 150 million shares compared with 3.5 billion shares and ADV of 151 million shares in Oct 2013.

The major reason behind the decline in trading performance may be the lesser number of trading days in November. There were 20 trading days in Nov 2013, compared to 23 trading days in Oct 2013. Hence, the performance actually remained stable.

On Oct 31, Investment Technology reported its third-quarter results with earnings per share of 20 cents beating the Zacks Consensus Estimate by 33.3%. Results benefited from top-line growth and declining operating expenses.

Total revenue rose 6.6% year over year to $127.6 million. Moreover, total expenses declined 2.2% to $116.9 million. As of Sep 30, 2013, cash and cash equivalents stood at $261.6 million compared with $259.0 million as of Jun 30, 2013.

Additionally, the Zacks Consensus Estimate for 2013 and 2014 increased marginally to 90 cents per share and $1.04 per share, respectively.

Other Stocks to Consider

Other investment brokers worth considering include KCG Holdings, Inc. (KCG), Ladenburg Thalmann Financial Services Inc. (LTS), and E*TRADE Financial Corp. (ETFC). Both KCG Holdings and Ladenburg Thalmann carry a Zacks Rank #1 (Strong Buy) while E*TRADE Financial holds a Rank #2 (Buy).

Read the Full Research Report on ITG
Read the Full Research Report on ETFC
Read the Full Research Report on KCG
Read the Full Research Report on LTS

Zacks Investment Research

View Comments (0)