On Dec 3, Zacks Investment Research upgraded Virtus Investment Partners, Inc. (VRTS) to a Zacks Rank #1 (Strong Buy).
Why the Upgrade?
Virtus Investment has been witnessing rising earnings estimates following the announcement of strong third-quarter results. Moreover, the bank has delivered a strong year-to-date return of 57.2%.
Virtus Investment reported third-quarter results on Oct 29. Earnings per share of $2.56 outpaced the Zacks Consensus Estimate by 12.8%. Results benefited from increased revenues, partially offset by higher operating expenses.
Total revenue, as adjusted, grew 39% year over year to $75.1 million. On the flip side, adjusted operating expense increased 22% from the prior-year quarter to $39.2 million.
Further, as of Sep 30, 2013, assets under management (:AUM) were $55.0 billion, up 32% from $41.8 billion as of Sep 30, 2012. Moreover, long-term AUM was $53.4 billion, increasing 33% year-over-year.
Additionally, in the said quarter, Virtus Investment repurchased 25,000 shares for $4.7 million. As of Sep 30, 2013, the company had 350,000 shares available for repurchase under extension of the program that was authorized by its board of directors in May 2013.
Additionally, over the last 30 days, the Zacks Consensus Estimate for 2013 increased 5.9% to $8.63 per share. Similarly, for 2014, the Zacks Consensus Estimate advanced 8.0% to $10.61 per share over the same time period.
Solid year-to-date returns and favorable estimate revisions stimulated the rank upgrade.
Other Stocks to Consider
While we prefer Virtus Investment, other finance stocks with a Zacks Rank #1 include Waddell & Reed Financial, Inc. (WDR), Artisan Partners Asset Management Inc. (APAM) and SVB Financial Group (SIVB).