Short Interest in LPL Financial Holdings Inc. (NASDAQ:LPLA) Declines By 40.4%

Key Points

• Short interest fell 40.4% to 2.89 million shares as of July 31, representing about 3.7% of LPL Financial’s outstanding shares and a 4.0-day short-interest ratio.
• LPL Financial exceeded quarterly expectations, reporting $5.84 in EPS versus the $5.39 consensus and $5.19 billion in revenue, up 35.2% year over year.
• Analyst sentiment remains favorable, with a consensus “Moderate Buy” rating and an average price target of $406.69; institutional investors own 95.66% of the stock.

LPL Financial Holdings Inc. (NASDAQ:LPLA - Get Free Report) was the target of a significant drop in short interest during the month of July. As of July 31st, there was short interest totaling 2,894,304 shares, a drop of 40.4% from the July 15th total of 4,852,571 shares. Approximately 3.7% of the shares of the stock are sold short. Based on an average trading volume of 720,682 shares, the short-interest ratio is presently 4.0 days.

LPL Financial Stock Performance

Shares of NASDAQ LPLA opened at $370.67 on Monday. The stock's 50 day moving average price is $319.20 and its two-hundred day moving average price is $315.61. LPL Financial has a 52-week low of $260.15 and a 52-week high of $400.16. The stock has a market capitalization of $29.19 billion, a P/E ratio of 29.56, a PEG ratio of 0.62 and a beta of 0.48. The company has a quick ratio of 2.39, a current ratio of 2.39 and a debt-to-equity ratio of 1.30.

LPL Financial (NASDAQ:LPLA - Get Free Report) last announced its quarterly earnings data on Thursday, July 30th. The financial services provider reported $5.84 earnings per share (EPS) for the quarter, topping the consensus estimate of $5.39 by $0.45. The firm had revenue of $5.19 billion for the quarter, compared to analysts' expectations of $5.04 billion. LPL Financial had a return on equity of 32.20% and a net margin of 5.13%.The firm's revenue for the quarter was up 35.2% on a year-over-year basis. During the same period last year, the business posted $4.51 earnings per share. On average, analysts anticipate that LPL Financial will post 24.09 earnings per share for the current fiscal year.

LPL Financial Announces Dividend

The firm also recently announced a quarterly dividend, which will be paid on Friday, August 28th. Shareholders of record on Friday, August 14th will be issued a dividend of $0.30 per share. This represents a $1.20 dividend on an annualized basis and a dividend yield of 0.3%. The ex-dividend date of this dividend is Friday, August 14th. LPL Financial's dividend payout ratio is 9.57%.

Insider Transactions at LPL Financial

In other news, Director Matthew Enyedi sold 1,000 shares of LPL Financial stock in a transaction dated Friday, July 31st. The shares were sold at an average price of $352.72, for a total transaction of $352,720.00. Following the completion of the sale, the director directly owned 13,121 shares in the company, valued at $4,628,039.12. The trade was a 7.08% decrease in their ownership of the stock. The sale was disclosed in a filing with the SEC, which is available through the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, Director Aneri Jambusaria sold 308 shares of the business's stock in a transaction on Wednesday, June 17th. The shares were sold at an average price of $306.00, for a total value of $94,248.00. Following the completion of the transaction, the director owned 6,415 shares of the company's stock, valued at $1,962,990. This trade represents a 4.58% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Company insiders own 0.60% of the company's stock.

Institutional Inflows and Outflows

Hedge funds and other institutional investors have recently modified their holdings of the business. Freestone Grove Partners LP bought a new stake in shares of LPL Financial during the 2nd quarter valued at about $50,174,000. Caisse de depot et placement du Quebec bought a new position in shares of LPL Financial during the second quarter valued at approximately $65,312,000. Man Group plc bought a new position in shares of LPL Financial during the second quarter valued at approximately $9,902,000. Roberts Glore & Co. Inc. IL acquired a new stake in shares of LPL Financial during the 2nd quarter worth approximately $213,000. Finally, Polar Asset Management Partners Inc. acquired a new stake in shares of LPL Financial during the 2nd quarter worth approximately $1,052,000. 95.66% of the stock is owned by institutional investors and hedge funds.

Wall Street Analysts Forecast Growth

Several equities research analysts have recently issued reports on the stock. UBS Group dropped their price objective on shares of LPL Financial from $395.00 to $391.00 and set a "buy" rating for the company in a research report on Wednesday, July 8th. JPMorgan Chase & Co. lifted their target price on shares of LPL Financial from $408.00 to $428.00 and gave the company an "overweight" rating in a report on Friday, July 31st. Wolfe Research reaffirmed an "outperform" rating and set a $454.00 price target on shares of LPL Financial in a research report on Wednesday. William Blair reiterated an "outperform" rating on shares of LPL Financial in a report on Thursday, June 4th. Finally, Weiss Ratings reissued a "hold (c)" rating on shares of LPL Financial in a research report on Friday, July 24th. Twelve research analysts have rated the stock with a Buy rating and four have assigned a Hold rating to the company. According to data from MarketBeat.com, the stock currently has a consensus rating of "Moderate Buy" and an average target price of $406.69.

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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