For Immediate Release
Chicago, IL- December 27, 2013 – Today, Zacks Investment Ideas feature highlights Features: Lazard ( LAZ- Free Report), Waddell & Reed ( WDR- Free Report) and GAMCO Investors ( GBL- Free Report).
The 'Great Rotation' Could Send These Stocks Soaring
The stock market is about to wrap up a banner year. The S&P 500 has surged more than +29% through December 26 and is poised to deliver its highest annual return since 1997. And following several years of investors pulling money out of the market, they have returned in droves in 2013.
According to the Investment Company Institute, net new cash flows have been positive every month for equity funds in 2013. Conversely, net flows for bond funds have been negative each month since June. Unsurprisingly, that's also when the word "taper" starting popping up everywhere.
This "Great Rotation" could very well remain a major investment theme in 2014 too. The Fed finally announced plans on December 19 to taper the amount of its long-term bond purchases. This drove the 10-year Treasury note above 3% on December 26 for the first since July 2011. And rates could very well continue to march higher as the Fed further winds down QE.
Rising long-term interest rates would continue to send bond prices lower and likely drive more and more investors out of bonds and into stocks. This alone could help drive equity prices higher in 2014.
Investment Management Industry Soaring
Given the remarkable price gains and multi-billion dollar positive fund flows, it should come as no surprise that the 'Investment Management' industry is currently one of the hottest based on earnings momentum.
According to the Zacks Industry Rank, it currently ranks 11th out of 265 industries. That puts it in the top 5% of all industries.
Of course, not all asset managers will benefit equally from the "Great Rotation". Investors should focus on those managers with a high percentage of assets under management in equities.
3 Investment Managers to Buy Now
Below are 3 investment managers who are well positioned to benefit from a continuation of the "Great Rotation":
Lazard ( LAZ- Free Report)
Lazard is a financial advisory and asset management firm with origins dating back to 1848. The company had $176.5 billion in assets under management as of September 30, 2013. Approximately 82% of that was in equities.
Lazard has delivered 3 positive earnings surprises in the last 4 quarters, with an average beat of 36%. It is a Zacks Rank #1 (Strong Buy) stock.
Waddell & Reed ( WDR- Free Report)
Waddell & Reed is one of the oldest mutual fund complexes in the United States. It had $114 billion in assets under management as of September 30, 2013, with 79% of that in equities.
Waddell has delivered 5 consecutive positive earnings surprises and carries a Zacks Rank of 1 (Strong Buy).
GAMCO Investors ( GBL- Free Report)
GAMCO Investors asset manager and financial services company with $43.5 billion in assets under management. Over 90% of its AUM is in equities.
Thanks to strong net inflows and equity markets, GAMCO has delivered 3 consecutive positive earnings surprises. Expect this streak to continue. GAMCO is a Zacks Rank #2 (Buy) stock.
The Bottom Line
With investors likely to continue shifting out of bonds and into stocks, equity asset managers could have another stronger year in 2014. And these 3 are particularly well-positioned to benefit.
Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978. The later formation of the Zacks Rank, a proprietary stock picking system; continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter; Profit from the Pros. In short, it's your steady flow of Profitable ideas GUARANTEED to be worth your time! Click here for your free subscription to Profit from the Pros.
Get the full Report on LAZ – FREE
Get the full Report on WDR – FREE
Get the full Report on GBL – FREE
Follow us on Twitter: https://twitter.com/ZacksResearch
Join us on Facebook: https://www.facebook.com/ZacksInvestmentResearch
Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.
Zacks Investment Research
800-767-3771 ext. 9339
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit http://www.zacks.com/performance for information about the performance numbers displayed in this press release.
For Immediate Release