Despite the challenges faced by the global asset management industry, organic inflows into ESG allocations are expected to continue, and sustainable investments like low-cost ETFs and private market funds are positioned to boost the asset management industry.

Therefore, I think investors could consider buying quality asset management stocks Silvercrest Asset Management Group Inc. (SAMG), Hywin Holdings Ltd. (HYW), and Ashford Inc. (AINC) this month. These stocks exhibit robust profitability.

The private markets present a significant growth opportunity for the asset management industry, with alternative investments accounting for over $20 trillion of global assets under management and contributing to half of the industry’s revenues.

Also, the Global Asset Management market is expected to expand at a CAGR of 28.4% from 2022 to 2028, reaching $1.79 trillion by 2028.

Moreover, the digital asset management industry is experiencing significant growth as users across industries adopt these solutions. Key drivers include the trend of digitization, increasing use of cloud-based services, integration of AI, rising use of metadata, etc.

As a result, the global digital asset management market is estimated to accelerate at a CAGR of 13.8%, to generate revenue of $15.20 billion by 2032.

In addition, the asset management industry continues to leverage the growing interest in ESG investing in 2023. As per ESG Clarity, managers may continue to increase their ESG AUM, partly to satisfy the 80% of millennial investors who value ESG as their top investment priority.

Given the backdrop, let us explore the above-mentioned stocks:

Silvercrest Asset Management Group Inc. (SAMG)

SAMG is a wealth management firm that provides financial advisory and related family office services. The company serves ultra-high-net-worth individuals and families, as well as their trusts; endowments; foundations; and other institutional investors. It also manages funds of funds and additional investment funds.

SAMG’s trailing-12-month asset turnover ratio is 0.63x, which is 212.6% higher than the industry average of 0.20x. Its trailing-12-month ROCE, ROTC, and ROTA of 16.95%, 9.41%, and 8.10% are higher than the 11.10%, 5.21%, and 1.12% industry averages.

SAMG recently paid a quarterly dividend of $0.18 per share of Class A common stock on June 16, 2023. It pays an annual dividend of $0.72, which translates to a yield of 3.44%, compared to a four-year average dividend yield of 4.39%. The company has raised its dividend payments for five consecutive years.

SAMG reported revenue of $29.43 million for the first quarter, which ended on March 31, 2023. The company’s adjusted net income amounted to $5.04 million or $0.35 per share.

Additionally, SAMG’s adjusted EBITDA amounted to $8.18 million. The company reported an AUM of $29.90 billion at the end of the first quarter.

SAMG’s EPS and revenue are expected to rise 13.7% and 8% year-over-year to $0.39 and $31.37 million, respectively, in the fiscal third quarter ending September 2023. Moreover, the company has an excellent earnings surprise history, surpassing the consensus revenue estimates in three of the trailing four quarters.

Shares of SAMG have gained 29.8% over the past three months, closing the last trading session at $20.90.

SAMG’s POWR Ratings reflect this promising outlook. The stock has an overall rating of B, which translates to a Buy in our proprietary rating system. The POWR Ratings are calculated by considering 118 different factors, each weighted to an optimal degree.

It also has a B grade for Momentum, Stability, and Quality. It is ranked #5 in the 54-stock Asset Management industry.

Click here to access additional SAMG ratings for Growth, Value, and Sentiment.

Hywin Holdings Ltd. (HYW)

Headquartered in Shanghai, China, HYW provides third-party wealth management, insurance brokerage, asset management, and other services.

On April 11, HYW announced the successful launch of a principal-protected structured product with a 9% risk control mechanism linked to the FactSet Hywin Global Health Care Index (FHGHC) in partnership with Swiss fintech firm Leonteq Securities AG and Arta TechFin, a hybrid fintech platform in traditional assets and digital assets.

This showcases HYW’s dedication to expanding its reach and expertise in serving its valued high-net-worth clientele, while also offering an alluring investment avenue within the dynamic global healthcare industry.

HYW’s trailing-12-month gross profit margin of 98.75% is 67.6% higher than the industry average of 58.91%. Its trailing-12-month ROCE, ROTC, and ROTA of 25.49%, 19.96%, and 10.46% are higher than the respective industry averages of 11.10%, 5.21%, and 1.12%.

During the first half of the fiscal year that ended December 31, 2023, HYW’s AUM increased by 114.3% year-over-year to RMB7.01 billion ($979.98 million). Its total revenue increased 17.6% year-over-year to RMB1.04 billion ($145.32 million).

Also, its income from operations increased by 15.5% year-over-year to RMB102.06 million ($14.26 million). The company’s net income amounted to RMB70.58 million ($9.86 million), while income per ADS stood at RMB2.43.

Street expects HWY’s revenue to increase 3.3% year-over-year to $291.18 million in the fiscal year ending June 2023. Its EPS is expected to rise 5.9% year-over-year to $1.25 in the current year.

The stock has gained 13.2% year-to-date to close the last trading session at $6.43.

HYW’s POWR Ratings reflect its robust outlook. The stock has an overall rating of B, equating to a Buy in our POWR Ratings system.

It also has an A grade for Sentiment and a B for Value, Momentum, and Stability. It is ranked first in the same industry.

In addition to the POWR Ratings stated above, HYW’s rating for Growth and Quality can be seen here.

Ashford Inc. (AINC)

AINC is an asset management firm, which provides investment management and related services to the real estate and hospitality sectors.

AINC’s trailing-12-month CAPEX/Sales of 5.99% is 212.4% higher than the 1.92% industry average. Its trailing-12-month asset turnover ratio of 0.62x is 204.9% higher than the industry average of 0.20x.

On April 4, 2023, AINC announced that its subsidiary Ashford Trust had garnered significant interest from investors following the launch of its latest product. Since the start of the offering, Ashford Trust has successfully sold over $13.3 million worth of Series J and Series K Redeemable Preferred Stock through Ashford Securities as the dealer manager.

On March 20, AINC announced that its RED Hospitality & Leisure, a leading watersports and resort services company, had acquired privately-held Alii Nui and Maui Dive Shop, Maui’s premier luxury catamaran and diving operation.

This strategic acquisition allows RED to enter the prestigious Maui market and diversify its revenue stream geographically. By establishing a presence in this sought-after location, RED is primed for further growth in Hawaii.

AINC’s total revenues rose 38.2% year-over-year to $185.12 million in the fiscal first quarter that ended March 31, 2023. Its operating income increased 56.8% from the year-ago quarter to $4.64 million. Its adjusted EBITDA came in at $17.61 million, up 17.5% year-over-year.

Also, the company’s adjusted net income grew 18.9% year-over-year to $13.37 million. Its adjusted net income per share available to common stockholders increased 10.6% from the previous-year quarter to $1.67.

Analysts expect AINC’s revenue to rise 8.5% year-over-year to $181.71 million in the fiscal second quarter ending June 2023. Additionally, it has topped consensus EPS and revenue estimates in each of the trailing four quarters, which is impressive.

Over the past month, the stock has gained 2.2% to close the last trading session at $10.22.

It is no surprise that AINC has an overall rating of B, which translates to Buy in our proprietary rating system.

The stock also has an A grade for Growth and Sentiment and a B for Value. It is ranked #4 in the same industry.

To access AINC’s additional Momentum, Stability, and Quality ratings, click here.

What To Do Next?

Get your hands on this special report with three low-priced companies with tremendous upside potential, even in today’s volatile markets:

3 Stocks to DOUBLE This Year >

SAMG shares were trading at $20.45 per share on Tuesday morning, down $0.45 (-2.15%). Year-to-date, SAMG has gained 11.04%, versus a 14.44% rise in the benchmark S&P 500 index during the same period.

About the Author: Kritika Sarmah

Her interest in risky instruments and passion for writing made Kritika an analyst and financial journalist. She earned her bachelor's degree in commerce and is currently pursuing the CFA program. With her fundamental approach, she aims to help investors identify untapped investment opportunities. More...

More Resources for the Stocks in this Article