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

Last updated: Apr 12, '19

Are you looking for the analysis of Affiliated Managers Group, Inc. (AMG) stock? Are you wondering what the bulls and the bears say about it?

If so, you came to the right place. In this stock guide, we will share with you 8 reasons to buy and 5 reasons to sell AMG stock. You’ll get a perspective on what the bulls and the bears say about it.

The analysis below may be also 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 / investment?
  • What are AMG analyst opinions, recommendations and ratings?

Let’s start with the bull case. Here are the reasons to buy AMG stock:

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 forward dividend yield is 1.20%, higher than the industry (0.43%) and sector (0.91%) forward dividend yields. See AMG forward dividend chart.

5. AMG forward P/E ratio is 7.20, and it’s low compared to its industry peers’ P/E ratios. See AMG forward P/E ratio chart.

6. AMG Price/Book ratio is 1.68, and it’s low compared to its industry peers’ P/B ratios. See AMG forward Price/Book ratio chart.

7. AMG average analyst rating is Buy. See AMG analyst rating chart.

8. AMG average analyst price target ($122.50) is above its current price ($110.45). See AMG price target chart.

Now that you understand the bull case, let’s look at the reasons to sell AMG stock (i.e., the bear case):

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 -6.60%, lower than the industry and sector average revenue growth (4.06% and 5.69%, respectively). See AMG revenue growth chart.

5. AMG profitability is declining. The YoY profit margin change was -21.04pp. See AMG profitability chart.

Now let's look at the key statistics for AMG:

Metrics AMG
Price $112.07
Average Price Target / Upside $122.50 / 9.31%
Average Analyst Rating Buy
Industry Asset Management
Sector Financial Services
Number of Employees 4,450
Market Cap $5.82B
Forward P/E Ratio 7.3
Price/Book Ratio 2.46
PEG 1.78
Revenue (TTM) $2.38B
YoY Quarterly Revenue Growth -6.6%
Profit Margin 10.24%

What are your thoughts on AMG?

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