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Category: Stock Market and Cohen & Steers
Date: 17 October 2019 Stock Price: $58.60 We take a look at the 3rd quarter earnings release of their 2019 fiscal year of Cohen & Steers, a global investment management firm specializing in liquid real assets.
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About Cohen & Steers
Cohen & Steers is a global investment manager specializing in liquid real assets, including real estate securities, listed infrastructure and natural resource equities, as well as preferred securities and other income solutions. Founded in 1986, the firm is headquartered in New York City, with offices in London, Hong Kong and Tokyo.
Overview of Cohen & Steers' latest earnings report
The data provided below refers to the latest quarter's data unless specified otherwise
- Total revenue $104.965 million (up from $98.33 million from the same quarter of the previous year)
- Total revenue increased by 6.74% over the last 12 months
- Total expenses: $64.832 million (up from $58.109 million for the same quarter of the previous year)
- Total expenses increased by 11.5% over the last 12 months
- Net income: $34.017 million (up from $30.790 million for the same quarter of the previous year)
- Diluted earnings per share: $0.69 (down from $0.65 for the same quarter of the previous year)
- Diluted weighted-average shares outstanding: 48.412 million (down from 47.524 million for the same quarter of the previous year)
- Dividend declared: $0.36 (up from $0.33 for the same quarter of the previous year)
- Dividend yield: 2.5%
- Cash and cash equivalents: $128.4 million
- Cash and cash equivalents per share: $2.67
- Cash and cash equivalents makes up 4.5% of Cohen & Steers market capital
- Assets under management: $70.8 billion
- Net inflows during the 3rd quarter of 2019 for Cohen & Steers: $1.1 billion
Cohen & Steers' management commentary on the results and earnings guidance
NEW YORK, NY, October 16, 2019—Cohen & Steers, Inc. (NYSE: CNS) today reported its operating results for the quarter ended September 30, 2019
Revenue
Revenue for the third quarter of 2019 was $105.0 million, an increase of 3.1% from $101.8 million for the second quarter of 2019. The change was primarily due to:
Expenses
Expenses for the third quarter of 2019 were $64.8 million, an increase of 1.8% from $63.7 million for the second quarter of 2019. The change was primarily due to:
Operating Margin
Operating margin was 38.2% for the third quarter of 2019, compared with 37.4% for the second quarter of 2019
- Diluted EPS of $0.70 ($0.65 as adjusted)
- Operating margin of 38.2% (38.8% as adjusted)
- AUM of $70.8 billion; average AUM of $68.6 billion
- Net inflows of $1.1 billion
Revenue
Revenue for the third quarter of 2019 was $105.0 million, an increase of 3.1% from $101.8 million for the second quarter of 2019. The change was primarily due to:
- An increase in investment advisory and administration fees of $2.9 million attributable to higher average assets under management. Changes to investment advisory and administration fee revenue by investment vehicle were as follows: Institutional account revenue increased $100,000 to $27.5 million; Open-end fund revenue increased $2.1 million to $48.5 million; and Closed-end fund revenue increased $711,000 to $20.7 million.
Expenses
Expenses for the third quarter of 2019 were $64.8 million, an increase of 1.8% from $63.7 million for the second quarter of 2019. The change was primarily due to:
- An increase in employee compensation and benefits of $1.0 million, primarily due to higher incentive compensation; and
- A decrease in distribution and service fee expense of $46,000, primarily due to the impact of redemptions from a higher cost intermediary which offset the increase attributable to higher average assets under management in U.S. open-end funds.
Operating Margin
Operating margin was 38.2% for the third quarter of 2019, compared with 37.4% for the second quarter of 2019
Cohen & Steers (NYSE: CNS) stock price history
The image below, obtained from Google, shows the stock price history of Cohen & Steers (NYSE: CNS) for the last 5 years. And it's been a decent time for Cohen & Steers stockholders. 5 years ago Cohen & Steers was trading at around $40 and its currently trading at $58.60. So the stock has grown by 46.50% over the last 5 years. While its not bad the opportunity cost of holding the stock is pretty high when one looks as the strong growth over the last 5 years some of the othe stock we valued recently showed, with a large number of companies having grown by well over 100% over a 5 year period, for example Netflix that increased by over 300% over the last 5 years. Cohen & Steers is trading at a lot closer to its 52 week high of $58.75 than it is to its 52 week low of $32.95, which to us is a clear indication that the short term sentiment and momentum of the stock of Cohen & Steers is very positive.
Recent coverage of Cohen & Steers
The extract below discusses Cohen & Steers in more as obtained from TheStreet.com
NEW YORK, Oct. 8, 2019 /PRNewswire/ -- Cohen & Steers, Inc. (NYSE:CNS) today reported preliminary assets under management of $70.8 billion as of September 30, 2019, an increase of $1.3 billion from assets under management at August 31, 2019. The increase in assets under management from August 31, 2019 was due to market appreciation of $931 million and net inflows of $613 million, partially offset by distributions of $275 million.
NEW YORK, Oct. 8, 2019 /PRNewswire/ -- Cohen & Steers, Inc. (NYSE:CNS) today reported preliminary assets under management of $70.8 billion as of September 30, 2019, an increase of $1.3 billion from assets under management at August 31, 2019. The increase in assets under management from August 31, 2019 was due to market appreciation of $931 million and net inflows of $613 million, partially offset by distributions of $275 million.
Cohen & Steers (NYSE: CNS) latest stock valuation
So based on the 3rd quarter 2019 earnings report of Cohen & Steers (NYSE: CNS) what do we value Cohen & Steers stock at? Based on the earnings report released by the group our valuation model provides a target (full value) price for Cohen & Steers at $54.90 a stock. We therefore believe the stock of Cohen & Steers is overvalued.
We suggest long term fundamental and value investors look to enter the stock at least 10% below our current target (full value) price of $54.90. Therefore we believe a good entry point into Cohen & Steers is at $49.40 or below. We expect the stock of Cohen & Steers to pull back in coming weeks and months to levels closer to our target (full value) price.
Note our valuation model took the strong net inflows for the 3rd quarter of 2019 into account and the impact it will have on the group's future earnings and we still believe the stock is overvalued.
We suggest long term fundamental and value investors look to enter the stock at least 10% below our current target (full value) price of $54.90. Therefore we believe a good entry point into Cohen & Steers is at $49.40 or below. We expect the stock of Cohen & Steers to pull back in coming weeks and months to levels closer to our target (full value) price.
Note our valuation model took the strong net inflows for the 3rd quarter of 2019 into account and the impact it will have on the group's future earnings and we still believe the stock is overvalued.
Next earnings release of Cohen & Steers
It is expected that the 4th quarter earnings release of Cohen & Steers will be released in late January 2020.