Core Insights - The article compares Affiliated Managers Group (AMG) and Ares Management (ARES) to identify which company presents a better investment opportunity for undervalued stocks [1] Group 1: Zacks Rank and Earnings Outlook - AMG has a Zacks Rank of 2 (Buy), indicating a more favorable earnings estimate revision trend compared to ARES, which has a Zacks Rank of 3 (Hold) [3] - The improving analyst outlook for AMG suggests a positive earnings estimate revision activity [3][7] Group 2: Valuation Metrics - AMG's forward P/E ratio is 10.22, significantly lower than ARES's forward P/E of 29.04, indicating that AMG may be undervalued [5] - AMG has a PEG ratio of 0.57, while ARES has a PEG ratio of 1.14, further suggesting that AMG is a better value option based on expected earnings growth [5] - AMG's P/B ratio is 1.71, compared to ARES's P/B of 6.74, reinforcing AMG's position as a more attractive investment based on market value versus book value [6] - These metrics contribute to AMG's Value grade of A and ARES's Value grade of C [6]

Industry Overview - The Zacks Investment Management industry is experiencing growth driven by asset growth, digital transformation, evolving investment vehicles, deeper personalization, and strategic scale [1] - Investment managers, also known as asset managers, manage various financial investments for clients, providing diversification and reducing volatility impacts [3] Key Trends - Continued asset inflows are expected to drive AUM growth, with equity markets performing well and institutional interest increasing [4] - There is a notable rise in inflows into alternative investments, including index funds, private credit funds, and ETFs, alongside the growth of tokenized assets [5] - Mergers and acquisitions (M&As) are being utilized by firms to expand scale, cut costs, and enhance product diversification [6][7] - Elevated expenses due to regulatory compliance and technology upgrades are anticipated to impact profits, although investments in AI and digital platforms may improve margins in the long run [9][10] Industry Performance - The Zacks Investment Management industry ranks 58, placing it in the top 24% of 243 Zacks industries, indicating positive near-term prospects [11][12] - The industry's earnings estimates have been revised upward by 1.9% since April 2025, reflecting growing analyst confidence [13] Comparative Analysis - Over the past two years, the industry has underperformed the S&P 500 Index, gaining 33.9% compared to the S&P 500's 52% increase [15] - The industry's trailing 12-month price-to-tangible book (P/TB) ratio is 3.35X, significantly lower than the S&P 500's 12.55X, indicating a discount compared to the broader market [18][19] Company Highlights - **Ameriprise Financial (AMP)**: As of September 30, 2025, AMP's total AUM was $1.66 trillion, with a CAGR of 5.9% in net revenues over the last five years [27][28]. The company has been restructuring to improve profitability and has a Zacks Rank of 2 (Buy) [31] - **Invesco (IVZ)**: IVZ's AUM reached $2.1 trillion as of September 30, 2025, with a CAGR of 8.5% over the last five years [34]. The company has undertaken initiatives to improve efficiency and has a Zacks Rank of 1 (Strong Buy) [38] - **Affiliated Managers Group (AMG)**: AMG's total AUM was $803.6 billion as of September 30, 2025, with a recent shift towards private markets and liquid alternatives to counter revenue challenges [41][43]. The company also holds a Zacks Rank of 1 [45]

Core Insights - Steady earnings growth is valued by company executives and analysts as a sign of profitability, but earnings acceleration has a stronger impact on stock prices, with leading stocks often experiencing this acceleration before price increases [1][3] - QuantumScape Corporation (QS), Silicon Laboratories Inc. (SLAB), and Affiliated Managers Group, Inc. (AMG) are currently demonstrating strong earnings acceleration [1][8] Earnings Acceleration Definition - Earnings acceleration refers to the incremental growth in a company's earnings per share (EPS), specifically when the quarter-over-quarter earnings growth rate increases over a specified time frame [2] Importance of Earnings Acceleration - Unlike earnings growth, which may already be reflected in stock prices, earnings acceleration helps identify stocks that have not yet attracted investor attention, leading to potential price rallies [3] - An increasing percentage of earnings growth indicates a fundamentally sound company, while a sideways or decelerating growth percentage may signal consolidation or a downturn [4] Screening Parameters - The screening process involves identifying stocks where the last two quarter-over-quarter EPS growth rates exceed previous periods' growth rates, with projected EPS growth rates for the upcoming quarter expected to surpass prior periods [5][6][7] - Additional criteria include a current price of at least $5 and an average 20-day trading volume of 50,000 or more to ensure adequate liquidity [7] Top Stocks Identified - The screening narrowed down approximately 7,735 stocks to nine, highlighting QS, SLAB, and AMG as top candidates showing strong EPS acceleration [8] - QuantumScape focuses on solid-state lithium-metal batteries for electric vehicles, with an expected earnings growth rate of 21.3% for the current year [9] - Silicon Laboratories specializes in analog-intensive mixed-signal solutions, with an expected earnings growth rate of 152.3% for the current year [10] - Affiliated Managers provides investment management services, with an expected earnings growth rate of 17.7% for the current year [11]

Core Viewpoint - Momentum investing focuses on following a stock's recent price trends, aiming to buy high and sell higher, with the expectation that established trends will continue [1] Company Overview: Affiliated Managers Group (AMG) - AMG currently holds a Momentum Style Score of A, indicating strong momentum characteristics [2] - The company has a Zacks Rank of 2 (Buy), suggesting it is positioned for potential outperformance [3] Price Performance - AMG shares have increased by 8.95% over the past week, significantly outperforming the Zacks Financial - Investment Management industry, which rose by only 0.15% [5] - Over the past month, AMG's price change is 10.8%, compared to the industry's mere 0.04% [5] - In the last quarter, AMG shares rose by 18.66%, and over the past year, they increased by 38.41%, while the S&P 500 only moved 4.53% and 13.83%, respectively [6] Trading Volume - AMG's average 20-day trading volume is 293,917 shares, which serves as a bullish indicator when combined with rising stock prices [7] Earnings Outlook - In the past two months, five earnings estimates for AMG have been revised upwards, with no downward revisions, leading to an increase in the consensus estimate from $24.26 to $25.13 [9] - For the next fiscal year, five estimates have also moved upwards without any downward revisions [9] Conclusion - Given the strong momentum indicators and positive earnings outlook, AMG is recommended as a stock to consider for near-term investment opportunities [11]

Group 1 - AMG announced an adjustment to the conversion rate of its 5.15% junior convertible trust preferred securities due 2037, increasing the conversion rate from 0.2558 to 0.2582 common shares per $50.00 junior convertible security, resulting in an adjusted conversion price of $193.6483 per common share [1] - The adjustment is in accordance with the indenture governing the conversion of the junior convertible securities and is a result of quarterly cash dividends paid by AMG on common shares since Q4 2019 [1] - The next quarterly cash dividend has an ex-dividend date of November 13, 2025, and is scheduled to be paid on November 28, 2025 [1] Group 2 - AMG is a strategic partner to leading independent investment management firms globally, focusing on generating long-term value through investments in high-quality independent partner-owned firms [2] - As of September 30, 2025, AMG's aggregate assets under management were approximately $804 billion, covering a diverse range of investment strategies including private markets and liquid alternatives [2]

Core Points - AMG announced an adjustment to the conversion rate of its 5.15% junior convertible trust preferred securities due 2037, increasing the conversion rate from 0.2558 to 0.2582 common shares per $50.00 junior convertible security, resulting in an adjusted conversion price of $193.6483 per common share [1] - The adjustment is in accordance with the indenture governing the conversion of the junior convertible securities and is a result of quarterly cash dividends paid by AMG on common shares since Q4 2019 [1] Company Overview - AMG is a strategic partner to leading independent investment management firms globally, focusing on generating long-term value by investing in high-quality independent partner-owned firms [2] - As of September 30, 2025, AMG's aggregate assets under management were approximately $804 billion, covering a diverse range of investment strategies including private markets, liquid alternatives, and differentiated long-only strategies [2]

Core Viewpoint - Affiliated Managers Group (AMG) has shown strong stock performance, with a 9.6% increase over the past month and a 40.4% gain since the start of the year, outperforming both the Zacks Finance sector and the Zacks Financial - Investment Management industry [1] Financial Performance - AMG has consistently exceeded earnings expectations, reporting an EPS of $6.1 against a consensus estimate of $5.83 in its last earnings report [2] - For the current fiscal year, AMG is projected to achieve earnings of $25.13 per share on revenues of $2.07 billion, reflecting a 17.65% increase in EPS and a 1.56% increase in revenues [3] - The next fiscal year forecasts earnings of $29.73 per share on revenues of $2.24 billion, indicating year-over-year changes of 18.32% in EPS and 7.93% in revenues [3] Valuation Metrics - AMG's current valuation metrics indicate a trading multiple of 10.3X current fiscal year EPS estimates, below the peer industry average of 12.1X [7] - The stock trades at 10.5X trailing cash flow, compared to the peer group's average of 11.8X, and has a PEG ratio of 0.58, positioning it favorably for value investors [7] Zacks Rank and Style Scores - AMG holds a Zacks Rank of 2 (Buy), supported by positive earnings estimate revisions from analysts [8] - The stock has a Value Score of A, a Growth Score of C, and a Momentum Score of A, resulting in a combined VGM Score of A, making it attractive for various investment styles [6][9] Industry Comparison - AMG's performance is compared favorably to peers, such as AllianceBernstein Holding L.P. (AB), which has a Zacks Rank of 1 (Strong Buy) and a Value Score of A [10] - AB is expected to post earnings of $3.86 per share on revenues of $3.57 billion for the current fiscal year, with a recent stock gain of 1.8% over the past month [11][12]

Assets Under Management - As of September 30, 2025, the company's total assets under management reached approximately $804 billion, reflecting a 10% increase from $728.4 billion in the same period of 2024[146][155]. - Average assets under management for the third quarter of 2025 were $786.9 billion, an 11% increase from $711.7 billion in the third quarter of 2024[155]. - As of September 30, 2025, 86% of private market assets under management were ahead of their relevant benchmarks, indicating strong performance[162]. - Approximately 28% of total assets under management could potentially earn performance-based fees as of September 30, 2025[166]. Financial Performance - Aggregate fees for the third quarter of 2025 totaled $1,346.0 million, representing a 16% increase compared to $1,157.1 million in the third quarter of 2024[155][156]. - Aggregate fees for the three months ended September 30, 2025, were $1,346.0 million, an increase of $188.9 million or 16% compared to the same period in 2024[169]. - Asset-based fees increased by $185.6 million or 16% for the three months ended September 30, 2025, primarily due to an increase in average assets under management[169]. - Performance-based fees increased by $3.3 million for the three months ended September 30, 2025, primarily in liquid alternative strategies[169]. - Net income (controlling interest) increased by $88.8 million or 72% for the three months ended September 30, 2025, primarily due to $127.6 million of Affiliate transaction gains[172]. - Adjusted EBITDA (controlling interest) increased by $36.8 million or 17% for the three months ended September 30, 2025, primarily due to a $188.9 million increase in aggregate fees[174]. - Consolidated revenue for the three months ended September 30, 2025, was $528.0 million, an increase of $11.6 million or 2% compared to the same period in 2024[178]. - Economic net income (controlling interest) increased by $26.5 million or 17% for the three months ended September 30, 2025[175]. - Net income (non-controlling interests) increased by $16.3 million or 26% for the three months ended September 30, 2025, reflecting strong performance across the board[207]. - Economic net income (controlling interest) for the nine months ended September 30, 2025, was $497.6 million, with economic earnings per share at $16.68[219]. Cash Flow and Investments - Operating cash flow for the nine months ended September 30, 2025, was $716.8 million, driven by net income of $526.1 million adjusted for non-cash items[227]. - Investing cash flow for the nine months ended September 30, 2025, was a net outflow of $258.6 million, mainly due to $515.1 million in investments in Affiliates[228]. - Financing cash flow for the nine months ended September 30, 2025, was a net outflow of $948.6 million, primarily due to $353.2 million in common stock repurchases and $350.0 million in senior notes repayment[229]. - Cash and cash equivalents as of September 30, 2025, totaled $476.1 million, primarily generated from operating activities[221]. Equity and Debt - The company has a $1.25 billion revolver maturing on November 15, 2029, with $100.0 million borrowed as of September 30, 2025[235]. - Senior notes outstanding as of September 30, 2025, included $350.0 million due in June 2030 and $400.0 million due in August 2034[236]. - The company is rated A3 by Moody's and BBB+ by S&P, maintaining an investment-grade capital structure[220]. - The company has junior subordinated notes outstanding with a par value of $300.0 million maturing in March 2059 and a stated coupon of 5.875%[238]. - The company recorded an impairment expense of $59.2 million attributable to the controlling interest for indefinite-lived acquired client relationships due to a decline in fair value[248]. Strategic Investments - The company completed a minority investment in NorthBridge Partners, LLC, and Verition Fund Management LLC, enhancing its portfolio in private markets and multi-strategy investments[147]. - An agreement was made to acquire a minority equity interest in Qualitas Energy, expected to close in Q4 2025, focusing on energy transition investments[148]. - A minority equity interest in BBH Credit Partners is set to be acquired, with the transaction expected to close in Q1 2026[151]. - The company entered into an equity distribution program allowing for the issuance and sale of common stock up to $500.0 million, with no sales occurring as of September 30, 2025[242]. Expenses and Taxation - Compensation and related expenses increased by $32.7 million or 15% for the three months ended September 30, 2025, primarily due to an increase in Affiliate equity compensation expense[182]. - Total consolidated expenses for the three months ended September 30, 2025, were $409.2 million, an increase of $34.5 million or 9% compared to the same period in 2024[181]. - Income tax expense increased by $40.3 million for the three months ended September 30, 2025, with an effective tax rate of 24.4% compared to 19.3% in the prior year[205]. Impairment and Revenue Projections - Revenue growth rates over the next five years were projected to range from (21)% to 0%, with a long-term revenue growth rate of 0% and a discount rate of 11% used in impairment assessments[248]. - A decrease in revenue growth rates by 200 basis points could result in an additional impairment of approximately $49 million, while a 100 basis point increase in the discount rate could lead to an additional impairment of approximately $91 million[249]. - No triggering events indicating impairment were identified for indefinite-lived acquired client relationships during the three and nine months ended September 30, 2025[250].

Core Insights - Investors are evaluating Affiliated Managers Group (AMG) and T. Rowe Price (TROW) for potential value opportunities in the investment management sector [1] Valuation Metrics - Both AMG and TROW currently hold a Zacks Rank of 1 (Strong Buy), indicating positive earnings estimate revisions for both companies [3] - AMG has a forward P/E ratio of 10.22, while TROW has a forward P/E of 10.50 [5] - AMG's PEG ratio is 0.57, suggesting a more favorable valuation relative to its expected earnings growth compared to TROW's PEG ratio of 3.30 [5] - AMG's P/B ratio is 1.71, compared to TROW's P/B of 2.03, indicating that AMG is valued more attractively relative to its book value [6] - Based on these valuation metrics, AMG is rated with a Value grade of B, while TROW has a Value grade of C, suggesting that AMG is the superior value option at this time [6]

Core Insights - AMG Critical Materials N.V. reported a strong performance in Q3 2025, with revenue of $435 million, a 22% increase from $356 million in Q3 2024, and an adjusted EBITDA of $64 million, up 58% from $40 million in the same period last year, primarily driven by the AMG Technologies segment [1][15][35] Financial Performance - Revenue for Q3 2025 was $434.7 million, compared to $356 million in Q3 2024, reflecting a 22% increase [12] - Adjusted gross profit rose to $88 million, a 38% increase from $63.7 million in Q3 2024 [15][31] - Net income attributable to shareholders was $13 million, the highest since Q2 2023, yielding a diluted EPS of $0.39 [15][37] - AMG's liquidity as of September 30, 2025, was $419 million, with $220 million in unrestricted cash and $199 million in revolving credit availability [15][33] Segment Performance - AMG Technologies achieved a revenue increase of 59% to $248 million in Q3 2025, driven by higher antimony sales prices and strong sales in engineering [24][27] - AMG Vanadium's revenue increased by 2% to $154 million, supported by higher sales prices in ferrovanadium and chrome metal [21][23] - AMG Lithium's revenue decreased by 33% to $32.7 million, primarily due to an 8% reduction in lithium market prices and a 32% decrease in sales volumes [16][19] Strategic Developments - The divestment of the natural graphite business is a key strategic move, expected to close later this year, allowing the company to focus on core growth areas [2] - AMG is expanding its production capabilities in the U.S., including becoming the only chrome metal producer in the country and targeting niobium metal and antimony oxide [4] - A memorandum of understanding was signed with Beijing Easpring Material Technology Co., Ltd. for the supply and offtake of battery-grade lithium hydroxide, emphasizing a commitment to a localized battery supply chain [8] Market Outlook - The company anticipates a recovery in the lithium and vanadium markets, positioning itself for long-term value creation despite current low-price environments [3] - AMG Technologies is expected to continue performing well, with an updated adjusted EBITDA outlook for 2025 increased from $200 million to over $220 million [35]