Core Insights - Federated Hermes is experiencing growth in assets under management (AUM) and has a strong liquidity position, but rising expenses pose a near-term concern [1][6] Group 1: Factors Fuelling Federated Hermes - The acquisition of money market assets has led to a 10.5% increase in money market AUM in the first nine months of 2024 compared to the same period in 2023, enhancing the company's fund offerings [2] - The company's average AUM has shown a five-year compound annual growth rate (CAGR) of 11.9% as of 2023, with continued growth in the first nine months of 2024, driven by strategic acquisitions and alliances [3] - As of September 30, 2024, Federated Hermes had long-term debt of $348 million and cash and other investments totaling $565 million, supporting its capital distribution activities, including a 10.7% increase in quarterly dividends to 31 cents per share [4] Group 2: Share Repurchase and Return on Equity - The company has authorized an additional share repurchase program of up to 5 million shares, with 1.24 million shares available under the existing program as of September 30, 2024 [5] - Federated Hermes boasts a trailing 12-month return on equity (ROE) of 29.85%, significantly higher than the industry average of 12.87%, indicating effective utilization of shareholders' funds [5] Group 3: Challenges Facing Federated Hermes - Rising operating expenses have been a concern, with a five-year CAGR of 8.7% from 2018 to 2023, primarily driven by intangible asset-related costs, and this trend has continued into the first nine months of 2024 [6] - Net investment advisory fees accounted for 67.2% of total revenues in the first nine months of 2024, making the company vulnerable to fluctuations in the fair value of securities and redemption levels, which could impact revenues and profitability [7] Group 4: Market Performance - Federated Hermes currently holds a Zacks Rank 1 (Strong Buy), with its shares gaining 25% over the past year, compared to a 39.6% rise in the industry [8]

Core Viewpoint - Federated Hermes is well-positioned to continue its earnings-beat streak, having consistently surpassed earnings estimates in recent quarters [1][3]. Earnings Performance - In the most recent quarter, Federated Hermes reported earnings of $1.06 per share, exceeding the expected $0.92 per share by a surprise of 15.22% [2]. - For the previous quarter, the company reported $0.96 per share against an expectation of $0.89 per share, resulting in a surprise of 7.87% [2]. Earnings Estimates and Predictions - There has been a favorable change in earnings estimates for Federated Hermes, with a positive Earnings ESP of +5.52%, indicating bullish sentiment among analysts regarding the company's earnings prospects [3][6]. - The combination of a positive Earnings ESP and a Zacks Rank of 2 (Buy) suggests a high likelihood of another earnings beat [6]. Statistical Insights - Stocks with a positive Earnings ESP and a Zacks Rank of 3 (Hold) or better have a nearly 70% chance of producing a positive surprise [4]. - The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate, with the Most Accurate Estimate reflecting the latest analyst revisions [5].

Core Viewpoint - Value investing remains a preferred strategy for identifying strong stocks, utilizing fundamental analysis and traditional valuation metrics to find undervalued stocks in the market [2] Company Overview: Federated Hermes (FHI) - Federated Hermes currently holds a Zacks Rank of 1 (Strong Buy) and a Value grade of A, indicating strong potential for value investors [4] - The stock has a Forward P/E ratio of 10.12, significantly lower than the industry's average Forward P/E of 17.77, with a 12-month range of 8.42 to 10.48 and a median of 9.56 [4] - FHI's P/B ratio stands at 3.18, compared to the industry's average P/B of 4.04, with a 52-week range of 2.32 to 3.27 and a median of 2.67 [5] - The P/S ratio for FHI is 2.17, which is lower than the industry's average P/S of 3.27, indicating a favorable valuation based on sales [6] - FHI has a P/CF ratio of 9.34, well below the industry's average P/CF of 36.28, with a 12-month range of 7.51 to 9.60 and a median of 8.52 [7] - Overall, the metrics suggest that Federated Hermes is likely undervalued, making it one of the strongest value stocks in the market based on its earnings outlook [8]

Core Viewpoint - Federated Hermes (FHI) is currently viewed as a better value opportunity compared to BlackRock Finance (BLK) based on various valuation metrics and earnings outlook [1][7]. Valuation Metrics - FHI has a forward P/E ratio of 13.50, while BLK has a forward P/E of 24 [5]. - The PEG ratio for FHI is 1.46, indicating a more favorable valuation relative to its expected earnings growth compared to BLK's PEG ratio of 1.85 [5]. - FHI's P/B ratio stands at 3.21, compared to BLK's P/B of 3.82, suggesting that FHI is more undervalued in terms of market value versus book value [6]. Earnings Outlook - FHI is currently experiencing an improving earnings outlook, which contributes to its strong Zacks Rank of 1 (Strong Buy), while BLK holds a Zacks Rank of 2 (Buy) [3][7].

Core Insights - Stocks hitting their 52-week high are perceived as winners and present attractive investment opportunities, but they may also face profit-taking and pullbacks [1][4] - Not all stocks at a 52-week high are overpriced; some may still have significant upside potential [2][5] Investment Strategy - A momentum investing strategy, "buy high, sell higher," can be effective in identifying stocks that may continue to rise despite being at a high price [4] - A screening process is employed to identify 52-week high stocks with strong earnings growth expectations, solid value metrics, and price momentum [7] Screening Criteria - Current Price/52 Week High >= 0.8 indicates stocks trading within 20% of their 52-week high [8] - Positive price changes over the past four weeks and twelve weeks ensure continued upward momentum [9][10] - Valuation metrics such as Price/Sales and P/E ratios are used to identify undervalued stocks compared to industry peers [11][12] - Zacks Rank of 1 (Strong Buy) is included to highlight stocks that have historically outperformed the market [13] - Minimum current price of $8 and a trading volume of at least 100,000 shares are set to ensure liquidity [14][15] Stock Highlights - **Synchrony Financial (SYF)**: Focus on CareCredit platform and strategic acquisitions expected to drive growth; Zacks Consensus Estimate for 2024 earnings increased by 1.6% to $1.52 per share [16][18] - **Federated Hermes (FHI)**: Strategic acquisitions in money market assets support AUM growth; Zacks Consensus Estimate for 2024 earnings increased by 5.7% to $3.15 per share [19][21] - **Norwegian Cruise Line Holdings (NCLH)**: Strong demand and pricing lead to record advance ticket sales; Zacks Consensus Estimate for 2024 earnings increased by 3.1% to $1.64 per share [23][24] - **State Street Corporation (STT)**: Solid business wins and strategic buyouts expected to support fee income; Zacks Consensus Estimate for 2024 earnings increased by 0.5% to $8.42 per share [25][26]

Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors rely on traditional forms of ...

Momentum investing revolves around the idea of following a stock's recent trend in either direction. In the 'long' context, investors will be essentially be "buying high, but hoping to sell even higher." With this methodology, taking advantage of trends in a stock's price is key; once a stock establishes a course, it is more than likely to continue moving that way. The goal is that once a stock heads down a fixed path, it will lead to timely and profitable trades.Even though momentum is a popular stock char ...

Federated Hermes, Inc. (FHI) is well-positioned to gain from its steady improvement in assets under management (AUM) balance in the near term. Further, backed by a decent liquidity position, its sustainable capital distribution activities are likely to continue enhancing shareholder value.Over the past month, shares of FHI have gained 8.7%. It has outperformed its industry, and close peers — Artisan Partners Asset Management Inc. (APAM) and BlackRock, Inc. (BLK) .Image Source: Zacks Investment ResearchWhat ...

Investors looking for stocks in the Financial - Investment Management sector might want to consider either Federated Hermes (FHI) or BlackRock Finance (BLK) . But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great grade in the Value category of our Style Scores system. The Zacks Rank favors stocks with strong earnings estimate revision t ...

Here are two stocks with buy rank and strong income characteristics for investors to consider today, November 15:Raymond James Financial, Inc. (RJF) : This diversified financial services company has witnessed the Zacks Consensus Estimate for its current year earnings increasing 5.8% the last 60 days.This Zacks Rank #1 company has a dividend yield of 1.1%, compared with the industry average of 0.7%.Federated Hermes, Inc. (FHI) : This global asset manager has witnessed the Zacks Consensus Estimate for its cur ...