Skip to main content

NEW YORK (TheStreet) -- Like other stocks we have pointed out in the past two months, Eaton Vance  (EV) - Get Eaton Vance Corp. Report has made a small double-bottom pattern in August and September. See chart below.

Image placeholder title

In this chart of EV, above, we can see that the On-Balance-Volume (OBV) line is improving irregularly. We are above the 50-day moving average, and the average line is pointed up. EV is close to a test of its 200-day average, which would be positive, and the Moving Average Convergence Divergence (MACD) oscillator is above the zero line -- also positive.

Image placeholder title

This longer-term chart of EV, above, shows a three-year sideways market. Recently, the OBV line has turned up and the MACD oscillator gave a positive crossover. These longer-term improvements, with a positive short-term view, should prompt further gains for EV into year end.

TheStreet Recommends

TheStreet Ratings team rates EATON VANCE CORP as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:

We rate EATON VANCE CORP (EV) a BUY. This is driven by multiple strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. Among the primary strengths of the company is its respectable return on equity which we feel is likely to continue. We feel its strengths outweigh the fact that the company has had lackluster performance in the stock itself.

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • Regardless of the drop in revenue, the company managed to outperform against the industry average of 5.7%. Since the same quarter one year prior, revenues slightly dropped by 3.3%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Capital Markets industry and the overall market, EATON VANCE CORP's return on equity significantly exceeds that of both the industry average and the S&P 500.
  • The change in net income from the same quarter one year ago has exceeded that of the S&P 500 and greatly outperformed compared to the Capital Markets industry average. The net income has decreased by 11.8% when compared to the same quarter one year ago, dropping from $77.94 million to $68.71 million.
  • EATON VANCE CORP's earnings per share declined by 9.5% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, EATON VANCE CORP increased its bottom line by earning $2.44 versus $1.51 in the prior year. For the next year, the market is expecting a contraction of 4.1% in earnings ($2.34 versus $2.44).
  • The gross profit margin for EATON VANCE CORP is currently lower than what is desirable, coming in at 34.42%. It has decreased from the same quarter the previous year. Regardless of the weak results of the gross profit margin, the net profit margin of 19.32% is above that of the industry average.
  • You can view the full analysis from the report here: EV

Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of Jim Cramer, TheStreet or any of its contributors.