KCG Holdings Upped to Strong Buy

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.

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


Zacks Investment Research