4 Reasons to Buy AllianceBernstein (AB) Stock Right Now
The Finance sector was one of the best performers in the first quarter. So, we thought of bringing up a stock from the sector that reflects strong fundamentals and solid long-term growth prospects.
AllianceBernstein Holding L.P. AB is one such stock that not only beat estimates this time, but also has been witnessing upward estimate revisions, reflecting analysts’ optimism about its growth prospects. Over the last 60 days, the Zacks Consensus Estimate for 2017 and 2018 increased 3.6% and 4.3%, respectively.
Nonetheless, shares of this Zacks Rank #2 (Buy) stock have lost 3.5% in the last six months, as against a gain of 7.6% for the Zacks categorized Investment Management industry. We believe the price trend should reverse in the coming days, driven by upbeat analysts’ view and the company’s strong fundamentals.
Notably, this New York-based asset manager has a number of other aspects that make it an attractive investment option.
Revenue Strength: AllianceBernstein’s revenues increased at a CAGR of 2.5% over the last four years (2012–2016). Further, the top line is expected to grow 5.1% in 2017, higher than the industry average of 3.5%.
Earnings Growth: AllianceBernstein witnessed earnings growth of 17.8% in the last three to five years. This earnings momentum is likely to continue in the near term as reflected by the company’s projected EPS growth rate (F1/F0) of 6.9%.
Further, the company’s long-term (three to five years) estimated EPS growth rate of 7.7% promises rewards for investors in the long run.
Superior Return on Equity (ROE): AllianceBernstein has an ROE of 11.64%, better than the industry average of 10.74%. This shows that the company reinvests its cash more efficiently.
Favorable VGM Score: AllianceBernstein has a VGM Score of ‘B’. Our research shows stocks with a VGM Score of ‘A’ or ‘B’ when combined with a Zacks Rank #1 (Strong Buy) or 2 offer the best upside potential.
Other Stocks Worth Considering
Some other stocks in the same industry worth considering include The Carlyle Group LP CG, Lazard Ltd LAZ and Noah Holdings Limited NOAH. All the stocks hold a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Carlyle Group’s earnings estimates were revised 51.2% upward for the current year, in the past 30 days. Also, its share price jumped 8.2% over the last three months.
Lazard’s current-year earnings estimates were revised 3.3% upward, over the last 30 days. Further, its shares increased 4.5% in the last three months.
Noah Holdings witnessed a 3.3% upward earnings estimates revision for the current year, in the past 60 days. Moreover in the last three months, its shares gained 7.8%.
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