NEW YORK (TheStreet) -- Eaton Vance (EV) shares are up 16.15% to $43.58 in market trading on Friday after the investment fund management firm became the first fund company to win approval from the SEC for nontransparent ETFs.
The new type of fund structure allows the Boston, Mass-based company to trade ETFs on an exchange but exempts it from having to disclose its holdings. The company said that it plans to launch 18 such funds over the next few months.
Last month the SEC rejected a similar bid from BlackRock (BLK) , the world's largest asset manager, so this ruling marks a reversal from the commission's previous stance.
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 several positive factors, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its compelling growth in net income, revenue growth, notable return on equity, expanding profit margins and good cash flow from operations. We feel these 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:
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Capital Markets industry. The net income increased by 235.9% when compared to the same quarter one year prior, rising from $23.20 million to $77.94 million.
- Despite its growing revenue, the company underperformed as compared with the industry average of 5.1%. Since the same quarter one year prior, revenues slightly increased by 4.9%. Growth in the company's revenue appears to have helped boost the earnings per share.
- The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. 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.
- 36.97% is the gross profit margin for EATON VANCE CORP which we consider to be strong. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 21.20% trails the industry average.
- Net operating cash flow has significantly increased by 191.72% to $151.30 million when compared to the same quarter last year. Despite an increase in cash flow of 191.72%, EATON VANCE CORP is still growing at a significantly lower rate than the industry average of 247.72%.
- You can view the full analysis from the report here: EV Ratings Report