On May 15, the Zacks Investment Research upgraded KCG Holdings, Inc. (KCG) to a Zacks Rank #1 (Strong Buy).
Why the Upgrade?
KCG Holdings has been witnessing rising earnings estimates on the back of impressive first-quarter 2014 results, which included significant top-line growth across all the segments. Moreover, the long-term expected earnings growth rate for the company is 10.0%.
KCG Holdings reported its first-quarter 2014 earnings on May 2 with earnings of 29 cents per share, comfortably beating the Zacks Consensus Estimate by 81.3%. Moreover, the investment broker delivered positive earnings beat in three out of four trailing quarters thereby maintaining an average positive surprise of 40.7%.
The first-quarter results were primarily driven by robust top-line growth partly offset by higher expenses. Total revenue stood at $383.7 million, up considerably from $115.0 million in the prior-year quarter.
Additionally, the trade volumes for the month of April seem encouraging as well. While Total Average Daily Shares Traded was $14.5 million, increasing substantially from Apr 2013, Average daily KCG BondPoint fixed income par value traded rose 12.5% to $141.5 million.
For 2014, the Zacks Consensus Estimate increased 22.8% to 97 cents per share over the last 30 days. For 2015, the Zacks Consensus Estimate advanced 8.3% to $1.18 per share over the same time period.
Other Stocks to Consider
Apart from KCG Holdings, other investment broker worth considering include E*TRADE Financial Corporation (ETFC), Interactive Brokers Group, Inc. (IBKR) and Investment Technology Group Inc. (ITG). All these stocks sport the same Zacks Rank as KCG Holdings.