Ticonderoga Reiterates a 'Sell' on Artio Global Investors (ART); Cut Full-Year Estimates on Weaker AUM
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Price: $2.74 --0%
Rating Summary:
1 Buy, 3 Hold, 2 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 13 | Down: 14 | New: 11
Rating Summary:
1 Buy, 3 Hold, 2 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 13 | Down: 14 | New: 11
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Ticonderoga reiterates a 'Sell' on Artio Global Investors (NYSE: ART), PT $11.50.
Ticonderoga analyst says, "We are lowering our full-year 2011 and 2012 adjusted EPS estimates for ART to $1.53 and $1.49, respectively, from $1.57 and $1.65 previously. Our GAAP 2011 and 2012 EPS estimates are now $1.37 for both years. We tend to view GAAP as a better proxy for earnings, as adjusted EPS excludes IPO stock-based awards, which affords ART the luxury to pay lower compensation. Our Q1 2011 estimate is unchanged at $0.40 ($0.36 GAAP). We expect ART to report outflows of $3.5 billion, or organic decay of 26%. ART looks inexpensive if it can sustain margins and international markets continue to partially offset rapid outflows. That gets harder as outflows accelerate and performance remains relatively weak. We believe ART needs to step up spending to improve distribution and product development to maintain competitiveness. This will hurt margins but likely improve the long-term profile of the company. Typically, AUM margins are in the high 20% to high 30% range. Right now, ART’s AUM margins are in the low 50% range."
For more ratings news on Artio Global Investors click here and for the rating history of Artio Global Investors click here.
Shares of Artio Global Investors closed at $16.08 yesterday.
Ticonderoga analyst says, "We are lowering our full-year 2011 and 2012 adjusted EPS estimates for ART to $1.53 and $1.49, respectively, from $1.57 and $1.65 previously. Our GAAP 2011 and 2012 EPS estimates are now $1.37 for both years. We tend to view GAAP as a better proxy for earnings, as adjusted EPS excludes IPO stock-based awards, which affords ART the luxury to pay lower compensation. Our Q1 2011 estimate is unchanged at $0.40 ($0.36 GAAP). We expect ART to report outflows of $3.5 billion, or organic decay of 26%. ART looks inexpensive if it can sustain margins and international markets continue to partially offset rapid outflows. That gets harder as outflows accelerate and performance remains relatively weak. We believe ART needs to step up spending to improve distribution and product development to maintain competitiveness. This will hurt margins but likely improve the long-term profile of the company. Typically, AUM margins are in the high 20% to high 30% range. Right now, ART’s AUM margins are in the low 50% range."
For more ratings news on Artio Global Investors click here and for the rating history of Artio Global Investors click here.
Shares of Artio Global Investors closed at $16.08 yesterday.
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