NYSE:AMP
$36.43
(10/2 4:02PM)
-1.5%
| Open | $36.23 |
Mkt Cap | $9.3 Billion |
| High | $37.8 |
52Wk High | $37.80 |
| Low | $36.12 |
52Wk Low | $11.74 |
| Volume | 5.5 Million |
Avg Vol 10D | 4.1 Million |
AMP Stock Evaluation
We are reiterating our Fairly Valued rating on AMP. We are content with this rating even though the price has risen 17.74% in the last week. We would normally be less enthusiastic about a stock that has seen price appreciate recently, but in this case earnings have more than kept pace with the rising price. This means that some key valuation metrics such as Price to Earnings have not been displaced enough to warrant a rating change.
Recommendation Summary
We are reaffirming our rating on AMP as of this week’s report. While we firmly believe that valuing companies based on fundamentals is very useful, we are careful not to view historical valuations in a vacuum. It is foolish to believe that a stock will always revert to historical norms. So, although there is value in historical norms, they only tell part of the story. When the market or a sector breaks through strategic thresholds such as standard deviations of historical pricing multiples, we find it necessary to view history with a grain of salt as a new reality may be dawning.
When a sector is as hot as the Financials sector is right now, we are certainly a little bit more cautious about recommending buying any stocks that have become too expensive. As this NYSE has continued to make gains in the recent weeks and months, we have become more bearish on the whole. However, as of this report we are satisfied to simply reaffirm our Fairly Valued rating. Please continue reading this report for a full explanation of our reasoning.
As far as price is concerned, an increase has occurred in AMP’s price from $30.94 as of 09/27/2009 to a price of $36.43 as of 10/03/2009. This increase of 17.74%, while not significant enough to cause a ratings downgrade at this time, does cause the attractiveness of AMP to decline slightly.
Second, since our last report, there have been no significant adjustments in earnings expectations or guidance.
AMP Revenue
For a long time, value investors have used the current share price relative to sales per share levels as an important valuation tool. We utilize a historical weighted average methodology that treats recent years more importantly in the calculation. When looking at AMP through this framework, we can see that our weighted average historical high and low Price to Sales per share ratios over the last 6 years are 1.95x and 0.89x respectively.
Utilizing this range we can see that AMP’s current Price to Sales per share ratio of 1.39x is somewhat below its historical weighted average by 3%. Given this level of sales per share, we suggest a neutral share price forecast. To the extent there is a further drop in the Price to Sales ratio from current levels, which would occur through some combination of increased sales per share or a decline in share price, we would only become more positive about the Price to Sales ratio outlook.
AMP Cash Earnings
Price to Cash Earnings analysis is inappropriate for this company due to an insufficient positive cash earnings history. Rather than calculating a potentially misleading Price to Cash Earnings analysis, we have chosen to give AMP a neutral Price to Cash Earnings outlook at this time. However, we should point out that this metric is a significant element in Ockham’s methodology to analyzing the outlook for any company. Therefore, for AMP, our assessment is now more dependent on the Price to Sales analysis, and investors should be cautious with a company with very limited, if any, positive cash earnings.
AMP Dividends
A positive Ockham rating does not require a company to pay out an inviting dividend or a dividend at all. However, we believe dividends provide a useful measure of a company’s inherent expectations.
Comparable to our analysis of Sales and Cash Earnings per share, we examine dividend yields from AMP against the historic high and low levels over an available data range. Because AMP has an established history of paying a dividend to shareholders, there is value in comparing recent dividends to historical dividends. In AMP’s case, the estimated annual dividend is $0.68 producing a current dividend yield of 1.87%. The highest dividend yield from AMP in recent history was 5.79% while the lowest dividend yield was 0.25%. It is never a good sign for a company to pay significantly lower dividends, in this case 38.08% below the median yield. Although, dividends are a relatively small portion of our analysis framework, we still see this as a negative factor.
“…loans.IMF raises 2010 global f’cast to 3.1% From 2.5% as Asia leads recovery.IMF: U.S. growth may be `sluggish’ 1.5% in 2010 as unemployment rises.AMERIPRISE to buy Columbia stock and bond funds from BofA for $1.2B cash.Bharti Airtel, MTN abandon $23B merger after South Africa objects to terms.Chinese automaker BYD says it aims to zoom past Toyota, become industry leader.Cisco to buy Tandberg, a videoconferencing-gear maker, for about …” – AMP on Zero Hedge
“…Income-Spending, Initial Claims, ISM Index, Auto SalesRecent Egan-Jones Rating ActionsROCKWELL AUTOMATION INC/DE (ROK)DEERE & CO (DE)NIKE INC (NKE)AMERIPRISE FINANCIAL INC (AMP)MICRON TECHNOLOGY INC (MU)POLO RALPH LAUREN CORP (RL)OXFORD INDUSTRIES INC (OXM)RELIANCE STEEL & ALUMINUM CO (RS)CALPINE CORP (CPN)PHILLIPS-VAN HEUSEN CORP (PVH)OXFORD INDUSTRIES INC (OXM)POLO RALPH LAUREN CORP (RL)MBIA INC (MBI)Data provided by Egan-Jones Ratings And …” – AMP on Zero Hedge
“…The electronics manufacturer reported better than expected results for fourth quarter and gave an upbeat forecast going forward. You know how much wall street likes that. The stock is up 10%. Number four is air miry — AMERIPRIZE financial. Nice day today. Word got out it’d buy columbia management from bank of america. Moody’s also affirmed AMERIPRIZE debt after the deal. The stock was up 11% earlier. Up 12.5% now. Very nice day for AMERIPRISE. Number three, discovery laboratories. Here is the biotech company. They develop therapies to treatment respiratory disorders. >> the material science company focused on clean energy. Exchanging it to build a factory up 70% earlier today. Number one, petro brass, the brazilian oil giant petrobras. …” – AMP on Countdown to the Closing Bell
“…“Bank of America continuing to tighten its belt. Selling off the long-term asset management business of its Colombia Management unit to AMERIPRISE FINANCIAL for a price tag of $1.2 billion dollars. The deal is expected to close in the spring and will make AMERIPRISE the 8th largest mutual fund manager, AMERIPRISE is actually rising to the upside.”– FBN’s The Opening Bell 9/30/2009 AMERIPRISE FINANCIAL (AMP), the Minneapolis, MN financial planning, services and products firm, has agreed to buy Columbia Management from Bank of America (BAC). The market is reacting quite favorably to the deal as AMP stock is nearly 14% higher in afternoon trading. Columbia Management has about $165 billion in assets under management as of the end of the second quarter and will be give AMERIPRISE an much bigger piece of the mutual fund management business. Bank of America has made it no secret that they were looking to unload non-core business units ever since regulators urged BofA to raise its capital cushion for potential losses back in May. Columbia Management, with its $165 …” – AMP on The Razor’s Edge
“…that was sure to attract some attention. Honestly, if anything we are a bit surprised that this asset did not attract a higher bid. In comparison, AMERIPRISE bought J&W Seligman & Co. last year which only had $18 billion in assets for $440 million. The current deal seems to offer a lot more bang for their buck. Either way, at this point both sides are pleased with what they are getting from the deal. Bank of America was able to bolster their cash reserves by getting rid of an asset that is not in a business they are pursuing right now. For AMERIPRISE, it will overnight transform them into an much bigger presence in long term asset management business for a reasonable price. A remarkably quick ascension to the top ten fund families since being spun out of American Express (AXP) in 2005. Also to AMERIPRISE’s benefit, there is a 5- year distribution deal in place that will help them sell their financial products through the world’s largest brokerage house Bank of America/Merrill Lynch. The deal for Columbia Management does increase the attractiveness of AMERIPRISE stock, but it is unlikely we will upgrade AMP after the share gains today. They have now tripled since hitting multiyear lows in March. As of last week’s report we reaffirmed our Fairly Valued stance on AMERIPRISE. That being said, this acquisition is a major step forward for AMERIPRISE allowing substantial cost savings and reports are that is will be accretive to earnings within the first year. Of course, the deal still needs to receive regulatory and shareholder approval. AMERIPRISE FINANCIAL Steps Up to the Big …” – AMP on The Razor’s Edge
“…A bmw gal, sorry. You have to look at– i’m loyal. Let’s take a quick look at three stocks that are moving right bank of america planning to sell the mutual fund management business of columbia to AMERIPRIZE for about 1.2 billion dollars, and bank of america is trying to raise capital. Take a look at AMERIPRIZE stock though, good purchase in the eyes of the investors, up 3.71 a bernstein raising price target to $33 from 31. Bernstein has a market perform rating on the cruise line operator, not helping that stock. And jabil fiscal profit sinking on lower sales and margins, but the markets continued to improve. The electronics component makers results topping guidance ap the stock is in the green. >> brian: all right. Go west to find value in commercial real estate. So says our next guest. Joining us is greg genvees, welcome to the program. >> thank you. >> brian: we’ve talked about mostly about the problems. Some say there’s opportunity. Some people say if you get into commercial real estate you’re in big trouble. Clearly there are some people still making money. How are they doing it? >> they’re doing it through and placing bets, frankly, in the right places. …” – AMP on Fox Business
“…Commercial real estate sector from dennis lockhart. Moving along to stocks i’m watching and stories many’ watching this morning. Bank of america continuing to tighten its belt. Selling off the long-term asset management business of its colombia management unit to AMERIPRIZE financial for a price tag of 1.2 billion dollars. The deal is expected to close in the spring and will make AMERIPRIZE the 8th largest mutual fund manager, AMERIPRIZE is actually rising to the upside and some news coming out about boston scientific saying that it will pay johnson & johnson a fine of $716 million over a 12-year battle regarding– over a dozen different lawsuits, regarding patent infringement, regarding their health stent products. Boston scientific says it will pay the fines out of a legal reserve that it has carried on its balance sheet and you can see boston scientific taking a hit. Brian, back over to you. >> all right. Shibani, thank you very much. Someone else is going on around the world. Time now to assign the papers and turn the page. Robert gray you have the new york post. Robert: spotted a new challenge for ashley webster, we know he’s a runner these days and battling an injury and trying to come back, ashley shall the gauntlet has been thrown down and talk about the straight and narrow, chinese man does a run every day and running the great wall or something must be pedestrian. He does it on the handrail of a 3,000 foot bridge, a suspension …” – AMP on The Opening Bell on Fox Business
“…Billion of total assets now, the eighth largest fund manager in the united states. And so we feel that it really transforms our asset management business and really integrates it further into the earnings power of AMERIPRISE. >> not quite doubling your size, but close. And are there some things that you can — some overlap, some synergies you can find — there >> yes. >> it’s the same business you’re running here, right? First of all, the deal actually helps us strengthen our distribution capabilities. It gives us a good long-term agreement with bank of america and their affiliates to distribute product through their channels, enhances financial institution operations, full range of product capabilities for both equity and fixed income for both the retail as well as high net worth investor. And from a perspective of the company, it really will continue to strengthen our product line, good performance as well as the investment talent in both fixed income equities as well as from a perspective of having a broad base of distribution capabilities now. …” – AMP on Squawk Box
“…That, if they can. It can be a good money we have seen what that kind of thing has done say for instance indifferent times or tough times, you might want to be able to hold on to something like connell: asset sale bank of america to AMERIPRISE some of their asset management units. Thank you charles. Back over to you in london, ashley:. The fate of cit group could be according to the "wall street journal," the commercial lender is close to a deal with its bondholders will like by a debt for equity offer which will result in bondholders taking control of the company. A swap though will wipe out 40% or more of the company’s 30 billion in debt. If it doesn’t get enough, bondholders to agree though, cit will likely be forced to file now one complicating factor in all of this is the government invested 2.3 billion dollars of tarp money into the company. Taxpayers will likely have to take a loss in either scenario. Common shareholders will also be completely wiped out either way sending the stock down sharply afterhours as you might see. All right, well, the banks could lose 1.5 trillion dollars more by the the end of next year. That’s the latest forecast from the international monetary fund. The imf however now says the financial institutions total …” – AMP on Money For Breakfast
“…Complex. We’re up on oil and back above a thousand dollars on the price of I mentioned this before we broke here before the top of the hour the breaking news out of bank of america this morning is it is announcing some asset sales operations to AMERIPRISE. It is paying between 900 million and 1.2 billion dollars for columbia managements, long-term asset management business. That particular division holds 165 billion dollars in equity and fixed income assets that the final price is going to be based on asset flows and investor consents that are leading up to closing of the b of a selling off some assets. What do you make of the move out of bank of america charles? Charles: pretty good move. Bank of america trying to find itself and really redefine what it wants to do. I think it does want to focus a lot on its banking business and might have gotten into some businesses that it doesn’t necessarily have expertise. Connell: does it have to get a lot smaller? We talk about that with citigroup sometimes. Is that the future for both of these government-supported banks that they will be a lot smaller and see more asset sales as a result of that? Charles: I think we will see a focus on a lot less different divisions. Will still have the same sort of footprint that they have now, but maybe more of a focus on just being banks rather than trying to be investment banks or money managers. …” – AMP on Money For Breakfast
“…Connell: for a clown we won’t get into our distaste for clowns right here ashley because we have to get to a break to get your top stories coming in at the top of the hour. B of, a selling off some assets it looks like one of its long-term asset management businesses to AMERIPRISE. Live. When you have a drug or alcohol problem,your whole world you can get help for and make sense of life again. For information, treatment and most importantly… Help, tdd: 800-487-4889. Brought to you by the u.S. And human services. …” – AMP on Money For Breakfast
“…>> you? >> jay and bill were the founder. Not jabil. >> I thought the same thing. But it’s not. >>> coming up at the top of the hour, AMERIPRISE ceo will join us. He will be talking about acquiring long-term assets of bank of america unit. Toyota announcing its largest recall in history. Floor mats causing a deadly disturbing details after this. Fidelity gives you the same tools the pros use,so you can be by selecting from eight your order gets executed, and with trailing stops lock in profits and minimize risk, you can be confident in your strategy, no matter which way find out why more and more are turning for a smarter way to trade online. Trade like a pro. …” – AMP on Squawk Box
“…Also five other democrats, 13-8 and then next one was 10-3. >>> breaking news story just in. AMERIPRISE FINANCIAL is buying a service of bank of america unit, columbia management, price about $1 billion, all-cash acquisition that includes $165 billion in we’ll have the ceo join inging us at 8:00 eastern to talk about what the deal means for AMERIPRISE, which would have been tough to buy in july. >> along with many other stocks in the market. >> i’m going to keep reading. Are you okay? >> yeah. >> flu season survey, john castellani, great to see you. >> how are you? Listen, we don’t want to overhype swine flu. Obviously, any business that ignores it does so at its own is corporate america ready? >> we are. In fact, we surveyed our members to see what the status of the readiness was and found 95% of our members already have in …” – AMP on Squawk Box
“…seeks $1.6B for its Macau unit.Recent Egan-Jones Rating ActionsGENWORTH FINANCIAL INC (GNW)ILLINOIS TOOL WORKS INC (ITW)CARRIZO OIL & GAS INC (CRZO)AMERIPRISE FINANCIAL INC (AMP)CKE RESTAURANTS INC (CKR)PEP BOYS-MANNY MOE & JACK (PBY)NUCOR CORP (NUE)RYDER SYSTEM INC (R)STONE ENERGY CORP (SGY)ORACLE CORP (ORCL)FEDEX CORP (FDX)CREDIT SUISSE GROUP AG (CSGN VX)EASTMAN KODAK CO …” – AMP on Zero Hedge
“…$0.01. Revenue of $6.1B (-18%) vs. $6.3B. Q2 provisions for losses $1.6B vs. year-ago $1.8B. Tier one risk-based capital ratio 9.6% at Q2 end. (PR) AMERIPRISE FINANCIAL (AMP): Q2 EPS of $0.58 in-line. Revenue of $1.9B (-5%) vs. $1.8B. (PR) Baidu.com (BIDU): Q2 adjusted EPS of $1.71 beats by $0.27. Revenue of $161M (+37%) vs. $158M. (PR) Broadcom (BRCM): Q2 EPS of $0.03 misses by $0.21. Revenue of $1B (-13%) in-line. (PR) Burlington Northern …” – AMP on Seeking Alpha Wall St Breakfast
“…results. Thursday’s show was no different as major results came from Amazon.com (AMZN), Microsoft (MSFT), CA, Inc (CA), Synovus Financial (SVN), AMERIPRISE FINANCIAL (AMP), American Express (AXP), Broadcom (BRCM), Netflix (NFLX), and Capital One (COF). All of these huge profit releases were discussed on The Closing Bell and many more as well. So far this season, most companies have beaten analysts estimates but Amazon and Mircosoft shares …” – AMP on The Razor’s Edge
“…>> liz: look at the stock of the day. We’re picking AMERIPRISE. Shares are lower than 8%. Bad day for them right now. The company said it would publicly offer $900 million of common stock. The company providing financial planning and asset management services to …” – AMP on Countdown to the Closing Bell
“…For some of this morning’s latest headlines. >> good morning, lex, a couple of stocks I want to you keep your eyes on throughout the trading day this morning. AMERIPRIZE, rather, financial, AMERIPRIZE financial another company trying to raise capital in the open market saying it will sell publicly 900 million dollars in common stock and use the proceeds for growth initiative and acquisitions, …” – AMP on The Opening Bell on Fox Business
“…Let’s talk about companies here. Banks are off ahead of that t.A.R.P. Announcement that mary was talking about. Prudential and allstate. AMERIPRISE, they refused several companies reported several than expected numbers. Texas instrument is up nicely, …” – AMP on Squawk On The Street
“…In court, they are about to present this deal to the judge. >> up next, disappointing housingidate amp . Hope that is the housing market has hit bottom. More on that straight ahead. >> then med tronic under …” – AMP on Squawk On The Street
“…That it was enough for regulators to potentially look into it. But the fundamental question is they were rallying because they were potentially going to take tarp money. Does that imply they are strong? Because we’ve already had prudential as well as AMERIPRIZE. They’re not going to take tarp does that make them stronger and more worthy to invest in versus the others who are taking tarp the ones — >> I don’t make any sense out of the call activity. …” – AMP on Fast Money
“…Co-founder of optionmonster.Com. What have you learned? >> the deeper you dig into it, you’ll become. Stocks like hartford financial and lincoln, as well as all state and AMERIPRISE, all the stocks that ended up being the six finalists for this $22 billion bailout had unusual activity and there had been speculation since november when these guys basically became …” – AMP on Closing Bell
“…In and out the ceremony. Hartford financial are trading lower. AMERIPRISE is in the green. At the end of the day, they’re looking at — the inturion companies look at what the banks have done and that the banks are are racing to pay back funds to have authority over the banks perhaps insurance companies …” – AMP on Countdown to the Closing Bell
“…Initially that worked and spurred rally in insurance companies across the board, but it didn’t last. Halfway through the trading session, trading halted and the news was out. It was AMERIPRISE FINANCIAL saying no thanks. To we’re adequately capitalized and we don’t want …” – AMP on Countdown to the Closing Bell
“…Set aside $22 billion and given preliminary improvers to prudential, hart fond, principle and lincoln national, and allstate and AMERIPRISE. Pru, all state and AMERIPRISE may be on the fence and they don’t want it. Prudential don’t even like conditions attached to the money. It raises flash of controversy on wall street. …” – AMP on Fox Business
“…Made the stocks attractive. They started trading in and out of positive territory throughout the day, as some companies stepped forward and said we don’t need the tarp. AMERIPRIZE financial through the trading day, the stock was halted pending news, saying that the company came out with the news saying that the current capital position …” – AMP on Fox Business
“…Could justify when this company isn’t totally in their hands. Counter. >> here’s today’s power play on bank of america. So AMERIPRISE initiated coverage of b of a with a buy rating. Right now at 10.84. >> hundreds of billions of dollars on the line in president …” – AMP on Power Lunch
“…>> another example why everybody is rushing to get out of the t.A.R.P. Money and another example of why it is you see prudential and maybe AMERIPRISE saying thanks but no thanks. >> some of these companies are paying back the t.A.R.P. Before they’re properly stabilize. You still don’t know exactly …” – AMP on Power Lunch
“…Six life insurances with preliminary approval. Those names are hard ford financial, prudential financial, principal financial group, all state and AMERIPRIZE. They don’t like terms and what we’re seeing, gang, this is key. This is being called tarp creep on wall street. It was set up to bail out banks, …” – AMP on Fox Business
“…To be heavy trading in those insurers, they’re in the spotlight this morning for traders, we’re talking about stocks like hartford financial, lincoln national, allstate. AMERIPRIZE, all of this after they received approval for billions of dollars of those government bailout funds, 22 billion to be injected into the insurers under tarp. …” – AMP on The Opening Bell on Fox Business
“…No word on the others. >> hartford was up 16% >> big numbers. >> allstate doing well, principal up, AMERIPRISE. >> what time did this come out? >> I was out doing it last night. I was out practicing with the boys little league and got a call on my blackberry saying I needed to look into it. >> that’s something for the …” – AMP on Squawk Box
“…Approved to get 3.4 billion dollars in a government loan. Other companies including in the program allstate, prudential, lincoln national, principal financial and AMERIPRISE all tolled these insurance companies will get 22 billion dollars. A tax and budget reform analyst at the public interest research group is joining us. Scott talbot financial services …” – AMP on Money For Breakfast
“…A handful of insurers the go-ahead to get billions of the names including hartford prudential, AMERIPRISE, prudent natural financial and principle financial group. Hartford says it’s been approved for ads 3.4 billion investment and lincoln national puts number at $2.5 billion. The journal reports the total capital injection will be less …” – AMP on Squawk Box
“…These are people who have every ability to be involved. They don’t have to be bank >> this is a system we need to look at again. We’re scheduled to get the stress test results later this friday, thursday, in the amp. Everyone from warren buffet on down is weighing in. >> and the market is hanging on to its advances. …” – AMP on Power Lunch
“…Rebecca: before we jump into how our political leaders are suffering from foot-in-mouth disease, as they amp up the alarm bells on pig flu, let’s chec out the medical facts, shahall we? This is all from our "happy hour" regular, dr. Marc siegel, a world authority on the avian flu and other infectious …” – AMP on Happy Hour
“…>> AMERIPRISE. >> maybe bring them both in on big choppers and would that be a great commercial. >> giddyap as you would say. All right, pop here. >> wild hog. >> you see the man here. …” – AMP on Fast Money
“…Modern times. >> lehman brothers filed for bankruptcy protection. Of america. Amp ig struggling to avoid collapse itself. It got drunk and now it’s got a hangover. >> it seems like ceos hit the lottery when their companies collapse. >> we are in the midst of a once in a century credit tsunami. >> when you ask about the taxpayers being on the hook, …” – AMP on Squawk Box
“…For a new perspective. Sit down with an ameriprisefinancial advisor for a complimentary"new perspective" review to help identifynew strategies and new opportunities. Sign up at AMERIPRISE.Com/newperspective. …” – AMP on Closing Bell
“…It’s time sit down with an ameriprisefinancial advisor for a complimentary"new perspective" review to help identifynew strategies and new opportunities. Sign up at AMERIPRISE.Com/newperspective. -( bell rings )- alright class, let’s button it.Becker?- here. -callahan?Callahan?- ( chirps ) …” – AMP on Street Signs
“…For a new perspective. Sit down with an ameriprisefinancial advisor for a complimentary"new perspective" review to help identifynew strategies and new opportunities. Sign up at AMERIPRISE.Com/newperspective. …” – AMP on Power Lunch