Noah Holdings Upped to Strong Buy - Analyst Blog

On Mar 8, Zacks Investment Research upgraded Noah Holdings Limited NOAH to a Zacks Rank #1 (Strong Buy).

Why the Upgrade?

Shanghai based investment management firm Noah Holdings has witnessed positive estimate revisions on the back of strong fourth-quarter 2013 results. The company has delivered positive earnings surprises in 3 of the 4 quarters of 2013 with an average beat of 61.8%. Further, the expected EPS growth rate now stands at 24.9%.

On Feb 26, Noah Holdings reported its fourth-quarter and full-year 2013 results. Income per ADS in the reported quarter came in at 24 cents, beating the Zacks Consensus Estimate by 20.0%. Results benefited from top-line growth aided by strong wealth management performance.

Driven by a surge in both third-party revenues and related party revenues, net revenue was up 81.1% year over year to $45.4 million. However, total expenses rose 75.6% to $18.3 million.

During the quarter, active clients were up 78.9% year over year to 2,927. Further, Noah Holdings distributed wealth management products worth around $1.9 billion in the quarter, representing an 81.0% increase from the prior-year period. Notably, it comprised 83.5% fixed income products, 11.6% private equity fund products while other products, including mutual fund products, private securities investment funds and insurance products, covered the remaining 4.9%.

As of Dec 31, 2013, total number of registered clients stood at around 53,501, reflecting a year-over-year rise of 32.7%.

Additionally, the Zacks Consensus Estimate for 2014 increased 5.5% to $1.16 per share.  

Other Stocks to Consider

Other stocks in this space worth considering include Fortress Investment Group LLC FIG, Lazard Ltd. LAZ and Och-Ziff Capital Management Group LLC OZM. All these stocks hold the same Zacks Rank as Noah Holdings.