Capital World Investors Buys 996,806 Shares of LPL Financial Holdings Inc. $LPLA

Key Points

• Capital World Investors increased its LPL Financial stake by 37.9% in the fourth quarter, buying 996,806 shares and bringing its total holdings to 3,625,357 shares valued at about $1.29 billion.
• LPL Financial reported better-than-expected quarterly earnings of $5.60 per share, topping estimates, while revenue rose 34.6% year over year to $4.94 billion.
• Analyst sentiment remains constructive, with a Moderate Buy consensus and an average price target of $398.86, even as some insiders recently sold shares.

Capital World Investors boosted its stake in shares of LPL Financial Holdings Inc. (NASDAQ:LPLA - Free Report) by 37.9% in the 4th quarter, according to the company in its most recent disclosure with the SEC. The firm owned 3,625,357 shares of the financial services provider's stock after buying an additional 996,806 shares during the quarter. Capital World Investors owned approximately 4.53% of LPL Financial worth $1,294,869,000 as of its most recent SEC filing.

Other institutional investors and hedge funds have also recently added to or reduced their stakes in the company. Coronation Fund Managers Ltd. boosted its position in LPL Financial by 24.5% during the third quarter. Coronation Fund Managers Ltd. now owns 187,973 shares of the financial services provider's stock worth $62,537,000 after purchasing an additional 36,950 shares during the period. Munich Reinsurance Co Stock Corp in Munich purchased a new stake in shares of LPL Financial in the third quarter worth about $1,975,000. Massachusetts Financial Services Co. MA lifted its holdings in shares of LPL Financial by 14.7% in the fourth quarter. Massachusetts Financial Services Co. MA now owns 3,719,447 shares of the financial services provider's stock worth $1,328,475,000 after buying an additional 477,094 shares in the last quarter. Empirical Financial Services LLC d.b.a. Empirical Wealth Management purchased a new stake in LPL Financial in the third quarter valued at approximately $4,583,000. Finally, Mitsubishi UFJ Asset Management Co. Ltd. raised its stake in LPL Financial by 7.1% in the fourth quarter. Mitsubishi UFJ Asset Management Co. Ltd. now owns 77,992 shares of the financial services provider's stock valued at $28,204,000 after purchasing an additional 5,179 shares in the last quarter. Institutional investors own 95.66% of the company's stock.

LPL Financial Stock Performance

LPLA stock opened at $288.49 on Monday. The company has a market capitalization of $23.07 billion, a PE ratio of 25.76, a price-to-earnings-growth ratio of 0.59 and a beta of 0.50. LPL Financial Holdings Inc. has a one year low of $260.15 and a one year high of $403.58. The company's 50 day moving average price is $302.79 and its two-hundred day moving average price is $331.74. The company has a debt-to-equity ratio of 1.26, a quick ratio of 2.56 and a current ratio of 2.56.

LPL Financial (NASDAQ:LPLA - Get Free Report) last posted its quarterly earnings results on Thursday, April 30th. The financial services provider reported $5.60 EPS for the quarter, topping the consensus estimate of $5.49 by $0.11. LPL Financial had a net margin of 4.93% and a return on equity of 31.26%. The firm had revenue of $4.94 billion for the quarter, compared to the consensus estimate of $4.98 billion. During the same period last year, the firm posted $5.15 earnings per share. The business's revenue was up 34.6% compared to the same quarter last year. As a group, analysts predict that LPL Financial Holdings Inc. will post 22.98 earnings per share for the current fiscal year.

LPL Financial Dividend Announcement

The business also recently declared a quarterly dividend, which was paid on Thursday, June 4th. Investors of record on Thursday, May 21st were issued a $0.30 dividend. The ex-dividend date was Thursday, May 21st. This represents a $1.20 annualized dividend and a yield of 0.4%. LPL Financial's payout ratio is 10.71%.

Analysts Set New Price Targets

A number of brokerages recently weighed in on LPLA. UBS Group raised their target price on shares of LPL Financial from $380.00 to $395.00 and gave the company a "buy" rating in a research note on Friday, May 1st. Morgan Stanley lowered their target price on shares of LPL Financial from $447.00 to $374.00 and set an "overweight" rating on the stock in a research note on Friday, April 10th. William Blair reaffirmed an "outperform" rating on shares of LPL Financial in a research note on Thursday. Keefe, Bruyette & Woods began coverage on shares of LPL Financial in a research note on Wednesday, April 8th. They issued an "outperform" rating and a $350.00 target price on the stock. Finally, Weiss Ratings reaffirmed a "hold (c)" rating on shares of LPL Financial in a research note on Monday, April 27th. One analyst has rated the stock with a Strong Buy rating, eleven have issued a Buy rating and four have given a Hold rating to the company. Based on data from MarketBeat, LPL Financial presently has a consensus rating of "Moderate Buy" and a consensus price target of $398.86.

Insider Buying and Selling at LPL Financial

In related news, CFO Matthew J. Audette sold 1,110 shares of LPL Financial stock in a transaction on Wednesday, April 15th. The shares were sold at an average price of $330.01, for a total value of $366,311.10. Following the sale, the chief financial officer owned 19,803 shares in the company, valued at $6,535,188.03. The trade was a 5.31% decrease in their ownership of the stock. The transaction was disclosed in a legal filing with the SEC, which is available at this link. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, Director Marc Eliot Cohen sold 1,088 shares of LPL Financial stock in a transaction on Tuesday, March 10th. The shares were sold at an average price of $309.72, for a total transaction of $336,975.36. Following the completion of the sale, the director owned 4,400 shares in the company, valued at approximately $1,362,768. This trade represents a 19.83% decrease in their position. The disclosure for this sale is available in the SEC filing. In the last quarter, insiders sold 2,667 shares of company stock worth $855,871. 0.60% of the stock is currently owned by company insiders.

About LPL Financial

LPL Financial NASDAQ: LPLA is a U.S.-focused financial services firm that provides brokerage, custodial and advisory platforms to independent financial advisors, registered investment advisers and institutions. Operating primarily as an independent broker-dealer and custodian, the company supports a network of advisors with the operational, compliance and clearing infrastructure needed to manage client accounts and deliver investment advice outside of traditional wirehouse models.

The firm's product and service offerings include trade execution and clearing, custody services, retirement plan services, model portfolio and advisory platforms, wealth management technology, investment research and product access across equities, fixed income, mutual funds, exchange-traded funds and insurance and annuity solutions.

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