The shares of our first idea today were just initiated with a ‘Buy’ rating at Jefferies. Our second recommendation is a sale of a company whose guidance has faltered.
Buy: LPL Financial Holdings Inc. (LPLA)
From Dow Theory Forecasts
LPL Financial Holdings Inc. (LPLA) offers a platform of brokerage and investment-advisory services to financial advisers, mostly concentrated in rural and suburban areas. LPL’s business is benefiting from a rising stock market; an environment of declining interest rates could prove challenging.
Well before the Federal Reserve lowered rates in July, LPL was adjusting its balance sheet to minimize the adverse effects of falling interest rates.
The shares have rallied 24% this year yet still look cheap at 11 times estimated 2019 profits, versus an average of 13.5 for financials in the S&P 1500 Index. LPL Financial is a Focus
List Buy and a Long-Term Buy.
Richard Moroney, CFA, Dow Theory Forecasts, www.dowtheory.com, 800-233-5922, August 12, 2019