Ladenburg Thalmann Hits 52-Week High on Acquisition Deal - Analyst Blog

Shares of Ladenburg Thalmann Financial Services Inc. (LTS) touched a new 52-week high of $4.50 in the last hours of the trading session on Oct 6. The stock closed at $4.44, reflecting a solid year-to-date return of 48.5%. The trading volume for the session was 0.5 million shares.

Despite the strong price appreciation, this Zacks Rank #2 (Buy) stock has plenty of upside left, given the estimate revisions witnessed over the last 60 days.

Growth Drivers

An acquisition deal, likely to further strengthen Ladenburg Thalmann's position as an industry-leading network of independent brokerage and advisory firms, acted as the primary growth driver.

On Sep 22, Ladenburg Thalmann signed a definitive agreement to acquire Knoxville, TN-based Securities Service Network, Inc., an independent broker-dealer, registered investment advisor and insurance agency. Valued at $45 million, the deal is expected to close late 2014 or early 2015.

The deal comes as part of Ladenburg Thalmann's long-term strategy to strengthen its position in the brokerage and advisory industry. Following the completion of this acquisition and two other pending transactions (KMS Financial Services, Inc. and assets of Sunset Financial Services, Inc.), the company would report annual revenues of nearly $1.1 billion.

Estimate Revisions

Over the last 60 days, the Zacks Consensus Estimate for 2014 has remained stable at 2 cents per share. For 2015, the Zacks Consensus Estimate soared 100% to 8 cents per share over the same time frame.

Some better-ranked finance stocks include Arlington Asset Investment Corp. (AI), First NBC Bank Holding Company (NBCB) and Simmons First National Corporation (SFNC). All these stocks sport a Zacks Rank #1 (Strong Buy).

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