Investment Managers' Earnings On Nov 2: PSEC, OMAM, GBL

Investment management industry, part of the broader Finance sector, has performed decently over the past several quarters. A modest performance of equity markets in the recent months was the key driver. In fact, post Brexit, majority of the industry participants have witnessed a notable rise in average assets under management (AUM).

Results of the investment management companies, which have already reported their third-quarter numbers, reflect this trend with favorable asset growth and strong trading activity.

However, the recently heightened regulatory restrictions have created a challenging backdrop for the traditional asset managers. Also, equity markets became volatile towards the end of the quarter, raising concerns regarding future prospects of the industry as a whole.

On the other hand, per our Earnings Preview report, overall earnings for the Finance sector in third-quarter 2016 are expected to be up 12.3% year over year.

Let’s have a look at the three investment management firms that are scheduled to report their results on Nov 2.

OM Asset Management plc (NYSE:OMAM) will announce its third-quarter 2016 results before the opening bell. The Zacks Consensus Estimate has remained stable for this stock ahead of its earnings release. The estimate of 30 cents per share reflects a year-over-year decline of 2.15%.

However, based on our proven model, we expect OM Asset to beat the Zacks Consensus Estimate in the upcoming release. This is because, the stock has the combination of a Zacks Rank #2 (Buy) and Earnings ESP of +3.33%, highlighting greater chances of an earnings beat.

You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.

Also, the company boasts a decent earnings surprise history. The stock has outpaced the Zacks Consensus Estimate in two of the trailing four quarters, recording an average positive earnings surprise of 1.7%.

Prospect Capital Corporation (NASDAQ:PSEC) will report its first-quarter fiscal 2017 (ended Sep 30) result. The stock carries a Zacks Rank #3 (Hold) and has an Earnings ESP of 0.00%. This makes it less likely to beat the Zacks Consensus Estimate in the forthcoming release. Though a Zacks Rank #3 increases the predictive power, we also need a positive Earnings ESP for an earnings surprise call.

Please check our Earnings ESP Filter that enables you to find stocks that are expected to come out with earnings surprises.

Moreover, the Zacks Consensus Estimate has remained stable for this stock ahead of its earnings release. The estimate of 24 cents per share reflects a year-over-year fall of 7.69%.

Nonetheless, the company boasts a decent earnings surprise history. The stock has surpassed the Zacks Consensus Estimate in three of the trailing four quarters, recording an average positive earnings surprise of 4%.

GAMCO Investors, Inc. (NYSE:GBL) is scheduled to release its third-quarter 2016 results. The Zacks Consensus Estimate has remained stable for this stock ahead of its earnings release. Notably, the estimate of 93 cents per share reflects year-over-year growth of 57.6%.

However, the stock is less likely to beat the Zacks Consensus Estimate in the forthcoming release, as it holds a Zacks Rank #3 and an Earnings ESP of 0.00%.

Moreover, the company does not have a decent earnings surprise history. The stock lagged the Zacks Consensus Estimate in three of the trailing four quarters, recording an average negative earnings surprise of 20.7%.

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