Speculations came up recently over the probable strategic plan of LPL Financial which will involve a feasible sale. As the investors weighed in the possibility, the stock made a significant jump in the late trading session on Tuesday, extending its gains earlier. The news has been convincing amid the financial concerns that the company faces lately.
A person familiar with the deliberation revealed that the company was having a discussion with Goldman Sachs and considering a possible sale. Currently, the company is dealing with lower commissions on some high-fee investment offerings as the central bank keeps its interest rate in the negative ground.
The broker-dealer still stands to its planned investments in technology infrastructure and to the addition of personnel, despite the twists and turns of the financial market. Recently, LPL also fixed the reported anomalies of its employees. From here, the company manages to drive market confidence which is evident to the path it has been taking in the stock market, taking into consideration the competition in the financial field.
In the recent trading session, LPL Financial rallied 6.86 percent to $33.01, advancing 2.12 after the short downtrend. The broker dealer strongly opened at $31.07 with an intraday high of $34.35 and an intraday low of $30.54. Three weeks before the earnings report, the market capitalization of the company stood at $2.95 billion. It has a price earnings ratio of 18.31 and a dividend yield of 3.03 percent.
As seen in the graph below, LPL Financial had been relatively strong with an uptrend for the last three months. The remarkable jump started on Tuesday, October 11 after the reported potential sale soon. However, the stock was still away from its $46 level attained at the start of the year ahead of the full-year and fourth quarter 2015 earnings release data and conference call announcement.
During the second quarter earnings report, LPL Financial reported a net income of $48 billion or $0.53 per share despite the volatile market. The Company has a pre-tax income of $80 million with gross profit of $345 million. Through the improving business fundamentals and disciplined expense management, the stock had an EBITDA of $132 million and core G&A of $168 million.
Chief Financial Officer Matt Audette said that their business model is generating strong earnings and cash flow as the commissions, advisory fees and sponsor revenues rallied in the second period of the year. The company extended its plan to tighten the 2016 Core G&A outlook range of $705 to $715 million and to invest more in service as well as in technology in the coming term.
On November 2, LPL Financial is scheduled to disclose its third quarter earnings data after the market closes. A conference call will follow after the announcement, whereas most of the speculators foresee upbeat revenue after the surge of total brokerage and advisory assets last August. Also, the balance sheet strength and the company’s efficiency will be highly expected.
In the United States, the LPL Financial Holdings is known as the largest independent brokerage dealer with more than 14,000 financial advisors. LPL Financial provides various financial products and services, from insurance, mutual bonds, equities, annuities to free-based programs which are free from a broker/dealer inspired conflicts of interest. The largest broker-dealer automates account opening and management, account rebalancing, transaction execution and document imaging.
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