Assets under management continued to grow -- up to $120 billion, up 14% year over year. Revenues and earnings continued to grow in lock-step, as revenue was up 13% to $216 million and earnings were up 17% to $41.8 million year over year. Because of a questionable share buyback (I think shares are currently fully valued), earnings per share increased by 17% year over year. Maybe the market tends to agree with me a bit, since shares are only up about 6% over the last year.
I've seen some commentators raise concerns that Eaton Vance does well for its stock shareholders at the expense of the mutual fund holders. This is because the shop has about $22 billion or so in closed-end funds, where original investors can buy into the fund but can't sell, thus generating fees in perpetuity for Eaton Vance. Investors can still trade shares, but the original investment is trapped within the fund. Great for shareholders, bad for investors stuck with a large investment they can't unload in a poorly performing fund. On the other hand, though, good performance can't be diluted by a huge inflow of new money, and outstanding funds can't be closed to new investors. But if this bothers you, keep in mind that closed-end funds make up about 18% of the assets under management at this point, hardly worth dropping the stock from your portfolio.
Still, the company has done well for shareholders. Does that make the stock a wise purchase now? At the risk of slighting the stock yet again, I feel there are far better bargains out there in money manager land, including companies like Legg Mason
For more money manager goodness:
- Calamos: A Unique Asset Manager
- AllianceBernstein Profits While Its Funds Idle
- Janus Goes for a Facelift
Fool contributor Stephen Ellis holds shares in Dell, but does not own shares in any other companies mentioned. You can see his holdings for yourself . The Motley Fool has an ironclad disclosure policy .
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