JThe US economy is kind of in a rut right now. Inflation, stagflation, recession fears, geopolitical issues and volatility in all types of markets, including stocks, commodities and bonds, create the perfect recipe for disaster. Investor sentiment constantly swings back and forth, reflecting their dilemma over whether or not to stay invested in the stock market.
Nevertheless, according to history, the stock market has always managed to bounce back from dire straits, delivering tremendous returns to investors who have made informed stock investment decisions. In this respect, following the thoughts and insights of market experts who are at the top of their game makes sense while making stock investment choices.
One such cohort of experts are Wall Street analysts, whose opinions have the power to influence stock prices. Their expertise in predicting the performance of a sector or a stock by diving deep into fundamentals and interpreting developments, makes it wise to follow them.
The reputation of our expert in the field of investment research
Today, in our Expert Spotlight article, we will highlight the contribution of a five-star analyst Glenn Green in the field of equity research. Be sure to stick with us till the end to learn more about his favorite stock pick and why he recommends it in uncertain times like these.
Greene is the managing director of renowned investment management firm Oppenheimer. With an MBA in finance from NYU Stern School of Business, Greene has followed the business and IT services sector at Oppenheimer for more than 13 years.
Notably, he was among the few analysts who had generated maximum returns on his stock picks in the 2010s, giving us all the more reason to draw inspiration from his views.
TipRanks Star Ranking, which takes into account an expert’s success rate, average returns generated, and statistical significance that improves as the number of trades or recommendations made by the expert increases, keeps Greene in head of list. Impressively, Greene is ranked #1 not only among the 7,938 tracked equity analysts on TipRanks, but also among the 16,993 market experts in the TipRanks universe.
The analyst has an 85% success rate, with an average return of 22.5% over the past year. In addition, over the past year, his picks have generated alpha of 9% on the S&P 500 index and 4.1% on the performance of the technology sector.
Greene’s most profitable stock recommendation was PayPal Holdings, Inc. (PYPL) in the year between January 20, 2017 and January 20, 2018, in which the stock had gained 101%.
Greene’s recent favorite stock pick
While he’s not as active in the stock recommendation scene as he used to be, his strong conviction makes it worth considering the single stock he’s recommended most recently.
On January 27, Green maintained his bullish stance on SEI Investments (NASDAQ: SEIC) with a buy rating set for January 27 of this year. The stock has gained 18.61% over the past five years.
Greene’s success rate on his recommendations on SEIC over the years has been 58%, with 18 accurate recommendations among 31 ratings on the stock.
Investors have had a love-hate relationship with the stock over the past five years, during which the financial services and investment platform provider grew earnings per share at a CAGR of 14%, but growth of the stock price experienced only a 3.47% CAGR.
Additionally, at 23%, SEI Investments’ total shareholder return over the past 5 years (including dividends, unit sales, etc.) has exceeded the share price return.
Despite this decline in investor confidence, there is little to look forward to. On April 20, SEI Investments announced its first quarter 2022 results, which saw revenue increase 28% year-over-year, driven by an increase in assets under management (AUM) and various increases in costs.
Additionally, the last leg of 2021 was action-packed for the company as it acquired 2 companies to expand its market share, diversify its offerings and increase its revenue. Another factor underlining the demand environment for SEI Investment’s services is the improving AUM balance. Again, increasing demand for the SEI Wealth Platform from growing financial institutions should keep the company’s finances healthy.
Wall Street, however, is trading cautiously on the outlook for the stock, with a Hold rating based on one buy and three Holds. The average SEIC price target is $65.50, indicating a 15.20% upside from Friday’s market close price level. The upside suggests that the street is quite optimistic about a near-term improvement in price performance.
The rest of the year holds the potential for even more turmoil than what we are currently experiencing. However, Greene’s expertise and track record show that his recommendation of SEIC can be considered sound advice, if you are looking for long-term equity investments. The current price/earnings ratio of 13.3 makes the company reasonably valued. Low stock prices (loss of 7% since the beginning of the year) could present a solid buying opportunity.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.