Invesco Ltd. (NYSE:IVZ)

CAPS Rating: 4 out of 5

The Company is an independent global investment manager, dedicated to helping people worldwide build its financial security.


Player Avatar NetscribeFinServ (20.08) Submitted: 2/14/2007 8:08:24 AM : Outperform Start Price: $19.96 IVZ Score: +49.89

AMVESCAP is one of the world largest independent asset mangers, operating with well-established brands in the investment space. It looks like a reinvigorated giant, full of life under the new leadership and has a good asset base, well diversified, spanning across all asset class, customer segments and geographies.

Though in the recent past, it had taken a beating with poor investment returns, decreasing margins, tarnished image and costly legal settlements, things are slowly changing from the recent quarter. AMVESCAP finished the year 2006 with assets under management (AUM) up 23.9% at $717 billion wholly attributed to market appreciation, acquisitions and foreign currency gains. The trend has been a gradual shift towards equity component from debt, serving more non-U.S. domicile clients as well as alternative investments stealing the spotlight.

The management is very much focused on cutting cost. Endorsing the same, it is consolidating its back office operations and reducing layer of decision-making process. Resorting to global human talent and relocation of jobs to low cost destinations like India and Canada would help it drive margins. Moreover it is consolidating its North American operations and re-branding itself as IVESCO.

The company is very bullish on the exchange traded fund segment (ETF) for which it has acquired Power Share Capital Management. Power Share has recently floated three new ETF in American Stock Exchange and has been selected by NASDAQ to sponsor its ETF from 2007, currently pending approval from Securities Exchange Commission. The private equity boutique WL Ross and Co seems to gain from the current growing global economy, robust corporate earning and positive signs like U.S capital market indices touching the all time high.

AMVESCAP is trading attractively, with a lower price to earning ratio among its peer groups, given its excellent profile after restructuring with a good asset mix and prospects steered by an excellent management.

Member Avatar NetscribeFinServ (20.08) Submitted: 4/23/2007 6:29:23 AM
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Global assets under management is expected to grow to more than $60 trillion by 2010 from less than $50 trillion today, and markets outside the U.S. will increasingly gain market share over the next few years. For the quarter ending March 2007, its total assets under management increased by 2% to $471.2 billion despite the global market volatility and money market redemptions of $0.8 billion during the quarter. Apart from this it is well diversified across multiple asset class, spanning all geographies. Its retail brands have a strong brand image and the acquisition of PowerShares helps its presence in the high growth areas of exchange-traded funds. Private equity of late has gained much fame and the purchase of WL Ross and Co with the restructuring specialist Wilbur Ross at the helm would help boost profits.

The asset manager has its own causes of concern ranging from paying penalties to other ethical issues. Moreover it carries more debt than its peer and enjoys less profitability. The company’s stock price in the recent months taking a hit comes good, as it is trading cheaply and a good time to amass the stock. The baby boomers nearing retirement has helped the financial advisors to sell pension products and still remains a bright spot.

However the new management team under the leadership of Martin Flanagan has pledged to trim $120 million from Amvescap's bloated cost structure. Reflecting the same it has started a pilot global enterprise support centers in India and Canada to provide operations and technology support for our businesses around the world that would offer greater flexibility across time zones, lower costs and improve efficiency. Summarizing the above mentioned facts the outlook for the stocks future performance looks good and all set to beat the market.

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