Today The Buyback Letter Analyst David Fried recommends a growing company in the financial industry. The stock pays a small quarterly dividend and has strong momentum.
State Street Corporation (STT) is one of the world’s leading providers of financial services to institutional investors including investment servicing, investment management and investment research and trading. With $25.4 trillion in assets under custody and administration and $2.2 trillion in assets under management (as of March 31, 2013), State Street operates in more than 100 geographic markets and employs 29,460 worldwide.
STT is a trust bank which provides securities services to institutional investors and back end services to investment managers. Trust banks are different from other commercial big banks because they do very little lending, and thus have minimum exposure to credit risk. Mostly, they generate fee-based income compared to more fund-based income by commercial banks.
Just days ago the stock price hit a 52-week high; the market cap is $31 billion. In its most recent quarter, revenue for State Street was $2.47 billion, and adjusted operating EPS of $0.96 exceeded analysts’ estimates by $0.03. Analysts find STT’s strengths in several areas — solid stock price performance, impressive record of earnings per share growth, attractive valuation levels, expanding profit margins and increase in net income.
Management has reduced shares outstanding by 6.7% in the last 12 months. New subscribers: Buy.
David R. Fried, The Buyback Letter, www.buybackletter.com, 888-289-2225, July 19, 2013