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Is it Advisable to Add Artisan Partners to Your Portfolio?


A favorable operating backdrop with the anticipation of another interest rate hike by the Fed has driven investors’ optimism for banking stocks. Therefore, we can add some of these stocks to our portfolio based on the banks’ strong fundamentals and solid long-term prospects.

Artisan Partners Asset Management Inc. APAM is one such stock. The company’s focus on the most attractive business mixes in the banking industry to tackle macroeconomic headwinds and strategic priorities, including core technology infrastructure, is anticipated to yield positive results for the stock.

Artisan Partners not only beat estimates in Q3, but has also been witnessing upward estimate revisions, reflecting analysts’ optimism about its future prospects. Over the last 30 days, the Zacks Consensus Estimate for 2017 and 2018 moved up 1.7% and 3.5%, respectively.

Further, shares of this Zacks Rank #2 (Buy) stock have gained around 24% over the past six months compared with 16.7% growth recorded by the industry it belongs to.

Notably, Artisan Partners has a number of other aspects which make it an attractive investment option.

4 Reasons Why Artisan Partners is a Must Buy

Earnings Per Share Strength: Earnings are anticipated to display an upswing in the near term, as the company’s projected EPS growth (F1/F0) is 52% compared to the industry average rate of 15.5%. In addition to this, Artisan Partners recorded an average positive earnings surprise of 0.74%, over the last four quarters.

Revenue Growth: Artisan Partners continues to make steady progress toward improving its top line — its sales recording four-year compounded annual growth rate (CAGR) of around 1.7% during the 2013-2016 period with some volatility. Further, the company’s projected sales growth (F1/F0) of 10.2% indicates continued upward momentum in revenues.

Valuation Looks Reasonable: Artisan Partners has a Value Score of B. The Value Style Score condenses all valuation metrics into one actionable score which helps investors steer clear of value traps and identify stocks that are truly trading at a discount. Our research shows that stocks with Style Scores of A or B, when combined with Zacks Rank #1 (Strong Buy) or #2, offer the best upside potential.

Superior Return on Equity (ROE): The company’s ROE of 95.1% compares favorably with the industry’s ROE of 13.1%, reflecting the company’s efficiency in utilizing shareholders’ funds.

Other Stocks to Consider

Enterprise Financial Services Corporation EFSC has been witnessing upward estimate revisions for the last 30 days. Additionally, the stock jumped more than 21% over the past year. It currently carries a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank stocks here.

First Financial Bancorp FFBC has been witnessing upward estimate revisions for the past month. Also, the company’s shares have risen nearly 18.9% in a year’s time. It holds a Zacks Rank of 2, at present.

Chemical Financial Corporation CHFC has been witnessing upward estimate revisions for the past 60 days. In six months’ time, the company’s share price has been up more than 5%. It also carries a Zacks Rank of 2.

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