Sector Snap: Asset managers fluctuate

The sector was led by Invesco Ltd., which was trading 4.5 percent higher at $13.59. Shares have traded between $10.20 and $32.25 in the past year. Brookfield Asset Management Inc. was up 67 cents, or 3.9 percent, to $17.79.

Goldman, Sachs & Co. analyst Marc Irizarry said Friday in an investor note that the third quarter was one of the toughest for asset managers, with median earnings per share down 26 percent year-over-year and assets under management falling 12 percent from the second quarter. The fourth quarter appears to be challenging as well.

He said balance sheets appear healthy overall but consolidation lurks around the corner.

"Upside appears limited and we expect the stocks to remain under pressure," he wrote in a note to clients. "A sustained market rally would alter that view."

Many companies in the sector are facing sharp declines in assets under management, though some companies have initiated only modest expense reductions.

Irizarry prefers more diversified managers capable of gaining asset share. He rates Eaton Vance Corp., Invesco and Blackrock Inc. at "Buy."

Eaton Vance was trading 1.4 percent higher at $21.20 and Blackrock was up 95 cents at $124.60 on Friday afternoon.

Irizarry advises avoiding single-focused companies that could see steep asset under management declines and margin pressure.

He has a "Sell" rating on Cohen & Steers Inc., which was trading down 9 cents at $14.94; on GAMCO Investors Inc., up nearly 3 percent at $35.28; and Calamos Asset Management Inc., down 4.1 percent at $6.79.