October 25, 2012
Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of investment house AllianceBernstein (NYSE: AB ) jumped as much as 13% today, following a strong earnings report boosted by its retail segment.
So what: Revenues for the asset manager rose 10%, thanks to a solid performance in its retail division and net customer inflows of $5 billion, the most the company has seen since 2000. Overall net revenue increased to $708 million. Adjusted EPS of $0.36 beat last year's $0.30 total, as well as analyst estimates of $0.27. The adjusted profit did not include an earlier-announced $168 million real estate charge, however, and the company actually posted a $56 million operating loss with that charge factored in. CEO Peter Kraus seemed to believe that things were turning around for investors, saying, "global equity and fixed income trends turned more favorable during the quarter."
Now what: After today's jump, the stock is pushing highs not seen since July 2011, and it received ratings upgrades from Keefe, Bruyette & Woods, and Sandler O'Neill on today's news. With retail investor trends looking beneficial for AllianceBernstein as money flows into bond funds and mutual funds, the stock could move higher. The company is heavily dependent on market sentiment, so it could see some volatility, but a 5.3% dividend yield should also help prop up the stock.
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