VRTS stock is testing pre-pandemic highs after the company reported earnings and revenue beats on July 24, 2020.
Virtus Investment Partners reported financial results for the three months ended June 30, 2020.
Virtus Investment reported Q2 adjusted EPS of $3.24 versus the consensus estimate of $3.02. The company reported Q2 adjusted revenue of $118.1M versus the consensus estimate of $113.92M.
Long-term assets under management increased 20% to $107.1 billion at June 30, 2020 from $89.5 billion at March 31, 2020 as a result of $15.2 billion of market appreciation and $2.5 billion of positive net flows. Total assets under management at June 30, 2020 were $108.5 billion, including $1.4 billion of assets in liquidity strategies.
Total sales of $9.1 billion increased 30% from the first quarter as a result of higher sales of open-end funds, retail separate accounts, and institutional. Open-end fund sales increased 13% sequentially to $4.4 billion with higher sales of domestic equity and investment grade fixed income funds. Retail separate account sales of $1.5 billion were up 40% sequentially primarily due to growth in the intermediary-sold channel. Institutional sales more than doubled to $3.1 billion as a result of flows into existing mandates as well as new mandates at multiple affiliates.
Net flows of $2.5 billion improved meaningfully from net outflows of $1.3 billion in the prior quarter due to positive net flows in open-end funds, retail separate accounts, and institutional. Open-end fund net flows of $0.4 billion reflected positive net flows in domestic equity and investment grade fixed income partially offset by net outflows in international equity and credit sensitive fixed income. Positive net flows of $0.8 billion in retail separate accounts included contributions from both the intermediary sold and private client channels. Institutional net flows of $1.5 billion improved from net outflows of $0.3 billion in the prior quarter.
On June 15, 2020, Barclays analyst Jeremy Campbell raised the firm’s price target on Virtus Investment to $118 from $105 and keeps an Overweight rating on the shares. If the market trades sideways to down, the “inflowing” asset managers are likely to outperform peers as there’s less risk of the “bottom dropping out” of assets under management from both weak flows and a market breakdown, Campbell tells investors in a research note.