LPLA
LPL Financial Holdings Inc.
Finance/Real Estate, Macro
09/26/2014
Presented
| Date | 09/22/2014 |
| Price | $48.08 |
| Market Cap | $4.83B |
| Ent Value | $5.91B |
| P/E Ratio | 25.89x |
| Book Value | $10.01 |
| Div Yield | 2.2% |
| Shares O/S | 100.40M |
| Ave Daily Vol | 510,000 |
| Short Int | 1.15% |
Current
| Price | $252.20 |
| Market Cap | $18.86B |
| LPL Financial Holdings Inc. operates as a holding company which through its subsidiaries provides an integrated platform of brokerage and investment advisory services to independent financial advisors and financial advisors at financial institutions in the United States. It operates through Independent Advisor Services and Institution Services segments. The company’s brokerage offerings include variable and fixed annuities, mutual funds, equities, retirement and 529 education savings plans, fixed income products, and alternative investments, such as non-traded real estate investment trusts and business development companies; and insurance offerings comprise personalized advance case design, point-of-sale service, and product support for a range of life, disability, and long-term care products. It also provides fee-based advisory platforms and support solutions, which offers access to no-load/load-waived mutual funds, exchange-traded funds, stocks, bonds, conservative option strategies, unit investment trusts, and institutional money managers and no-load multi-manager variable annuities. In addition, the company offers cash sweep programs, including money market and insured bank deposit sweep vehicles; and provides fee-based and commission-based retirement solutions. Further, it provides other services, which include tools and services that enable advisors to maintain their practice; and administrative and custodial services to trusts for estates and families, as well as open architecture investment management solutions to trust departments of financial institutions. Additionally, the company offers solutions and consulting services to registered investment advisors, banks, and trust companies. It provides services to approximately 13,600 independent financial advisors; and financial advisors at approximately 700 financial institutions. LPL Financial Holdings Inc. was formerly known as LPL Investment Holdings Inc. and changed its name to LPL Financial Holdings Inc. in June 2012. |
Publicly traded companies mentioned herein: LPL Financial Holdings Inc (LPLA), Morgan Stanley (MS), RCS Capital Corporation (RCAP), Raymond James Financial, Inc. (RJF)
Highlights
LPL Financial Holdings’ (LPLA) model of providing a platform for, and back office support to, independent financial advisors is an interesting business. The “breakaway trend” – whereby a financial advisor or broker can leave a larger wire house to set up and build out his/ her own independent business – and potential for higher interest rates should be legitimate tailwinds for the company; however, the presenter is short shares of LPLA due to the belief that the company has been materially over-earning and faces increasing regulatory and compliance expenses that will erode margins.
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