Affiliated Managers Group, Inc. (AMG) Buy or Sell Stock Guide

Last updated: Dec 24, '18

The analysis below may be helpful to you if you have any of the following questions about AMG stock:

  • Is AMG a buy or a sell?
  • Should I sell or hold AMG stock today?
  • Is AMG a good buy / a good investment?
  • What are AMG analyst opinions, recommendations, ratings?

Here are AMG stock buy reasons/signals:

1. AMG has built a portfolio of well-regarded affiliates, including Yacktman, Tweedy Browne, AQR Capital Management, Harding Loevner, BlueMountain, and Genesis Asset

2. AMG's affiliate model provides it with a diverse mix of AUM and earnings, with exposure to both value and growth equity strategies, emerging-market equities, fixed-income products, and alternative investments.

3. Concerns about higher tax rates and ongoing succession planning at boutique asset managers have supported the sale of equity stakes in many of these types of firms to larger financial institutions like AMG in the past.

4. AMG stock price ($92.47) is close to the 52-week low ($92.20). Perhaps now is a good time to buy?

5. AMG profitability is improving. The YoY profit margin change was 8.78pp.

6. AMG forward dividend yield is 1.21%, higher than the industry (0.61%) and sector (1.16%) forward dividend yields.

7. AMG forward P/E ratio is 6.12, and it’s low compared to its industry peers’ P/E ratios.

8. AMG Price/Book ratio is 1.39, and it’s low compared to its industry peers’ P/B ratios.

9. AMG average analyst rating is Buy.

10. AMG average analyst price target ($152.33) is above its current price ($92.47).

Here are AMG stock sell reasons/signals:

1. AMG's investment strategy doesn't generate many meaningful synergies or efficiencies, with the firm ceding the operating leverage inherent in the asset -management business to its affiliates

2. AMG's core business strategy depends on continued growth from its existing cadre of affiliates, as well as successful new investments in boutique asset managers.

3. As the size and scale of AMG's operations increase, the firm will need to make larger and larger investments or increase the number of deals it does in any given year to move the needle, increasing the risks associated with this strategy.

4. AMG quarterly revenue growth was 2.70%, lower than the industry and sector average revenue growth (4.68% and 6.45%, respectively).

5. AMG PEG ratio (P/E adjusted for growth) is 1.18, and it’s high compared to its industry peers’ PEG ratios.

What are your thoughts on AMG?

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