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If You Invested $1000 in LPL Financial Holdings Inc. a Decade Ago, This is How Much It'd Be Worth Now
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For most investors, how much a stock's price changes over time is important. This factor can impact your investment portfolio as well as help you compare investment results across sectors and industries.
FOMO, or the fear of missing out, also plays a role in investing, particularly with tech giants and popular consumer-facing stocks.
What if you'd invested in LPL Financial Holdings Inc. (LPLA - Free Report) ten years ago? It may not have been easy to hold on to LPLA for all that time, but if you did, how much would your investment be worth today?
LPL Financial Holdings Inc.'s Business In-Depth
With that in mind, let's take a look at LPL Financial Holdings Inc.'s main business drivers.
LPL Financial Holdings Inc. is based in Boston, MA. It is a clearing broker-dealer and an investment advisory firm that acts as an agent for its advisors, on behalf of their clients, by providing access to a broad array of financial products and services.
LPL Financial conducts business through its subsidiaries. Some of the important ones are:
LPL Financial LLC is broker-dealer and an investment adviser, which clears and settles customer transactions.
LPL Employee Services, LLC is a holding company for Allen & Company of Florida, LLC, a registered investment adviser (RIA).
Fortigent Holdings Company provides solutions and consulting services to RIAs, banks and trust companies serving high-net-worth clients.
LPL Insurance Associates, Inc., operates as a brokerage general agency that offers life and disability insurance sales and services.
AW Subsidiary, Inc. is a holding company for AdvisoryWorld and Blaze Portfolio Systems LLC. AdvisoryWorld provides technology products, including proposal generation, investment analytics and portfolio modeling. Blaze offers an advisor-facing trading and portfolio rebalancing platform
LPL Financial has been expanding through acquisitions. In 2011, the company acquired Concord Capital Partners, Inc. and certain assets of National Retirement Partners. In 2012, it purchased Fortigent. In 2017, the company acquired certain assets and rights of National Planning Holdings, Inc.
In 2018, LPL Financial acquired all of the outstanding shares of AdvisoryWorld. In 2019, it acquired Allen & Company of Florida. In 2020, it acquired the assets of E.K. Riley Investments, Lucia Securities and Blaze Portfolio. In 2021, the company acquired Waddell & Reed's wealth management business.
As of Jun 30, 2022, LPL Financial had total advisory assets of $558.6 billion and brokerage assets of $506 billion. As of the same date, it had cash and cash equivalents of $700.4 million, total assets of $7.74 billion and shareholders’ equity of $1.84 billion.
Bottom Line
Anyone can invest, but building a successful investment portfolio requires research, patience, and a little bit of risk. So, if you had invested in LPL Financial Holdings Inc. ten years ago, you're likely feeling pretty good about your investment today.
A $1000 investment made in October 2012 would be worth $8,138.57, or a 713.86% gain, as of October 6, 2022, according to our calculations. Investors should note that this return excludes dividends but includes price increases.
In comparison, the S&P 500 gained 158.96% and the price of gold went up -7.42% over the same time frame.
Analysts are forecasting more upside for LPLA too.
Shares of LPL Financial have outperformed the industry over the past year. Its earnings outpaced the Zacks Consensus Estimate in each of the trailing four quarters. Strategic acquisitions, including the buyout of Waddell & Reed's wealth management business, will likely keep supporting the company's financials. Moreover, solid advisor productivity and recruiting efforts are expected to keep aiding advisory revenues. Further, LPL Financial's efficient capital deployment activities reflect a solid balance sheet position. However, elevated operating expenses mainly due to higher compensation and benefits expenses might hurt profits to an extent. Uncertainty regarding the performance of the capital markets and the presence of substantial amounts of goodwill on the company’s balance sheet are other woes, which make us apprehensive.
Over the past four weeks, shares have rallied 7.86%, and there have been 3 higher earnings estimate revisions in the past two months for fiscal 2022 compared to none lower. The consensus estimate has moved up as well.
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If You Invested $1000 in LPL Financial Holdings Inc. a Decade Ago, This is How Much It'd Be Worth Now
For most investors, how much a stock's price changes over time is important. This factor can impact your investment portfolio as well as help you compare investment results across sectors and industries.
FOMO, or the fear of missing out, also plays a role in investing, particularly with tech giants and popular consumer-facing stocks.
What if you'd invested in LPL Financial Holdings Inc. (LPLA - Free Report) ten years ago? It may not have been easy to hold on to LPLA for all that time, but if you did, how much would your investment be worth today?
LPL Financial Holdings Inc.'s Business In-Depth
With that in mind, let's take a look at LPL Financial Holdings Inc.'s main business drivers.
LPL Financial Holdings Inc. is based in Boston, MA. It is a clearing broker-dealer and an investment advisory firm that acts as an agent for its advisors, on behalf of their clients, by providing access to a broad array of financial products and services.
LPL Financial conducts business through its subsidiaries. Some of the important ones are:
LPL Financial LLC is broker-dealer and an investment adviser, which clears and settles customer transactions.
Private Trust Company, N.A. offers trust administration, investment management oversight and Individual Retirement Account (IRA) custodial services.
LPL Employee Services, LLC is a holding company for Allen & Company of Florida, LLC, a registered investment adviser (RIA).
Fortigent Holdings Company provides solutions and consulting services to RIAs, banks and trust companies serving high-net-worth clients.
LPL Insurance Associates, Inc., operates as a brokerage general agency that offers life and disability insurance sales and services.
AW Subsidiary, Inc. is a holding company for AdvisoryWorld and Blaze Portfolio Systems LLC. AdvisoryWorld provides technology products, including proposal generation, investment analytics and portfolio modeling. Blaze offers an advisor-facing trading and portfolio rebalancing platform
LPL Financial has been expanding through acquisitions. In 2011, the company acquired Concord Capital Partners, Inc. and certain assets of National Retirement Partners. In 2012, it purchased Fortigent. In 2017, the company acquired certain assets and rights of National Planning Holdings, Inc.
In 2018, LPL Financial acquired all of the outstanding shares of AdvisoryWorld. In 2019, it acquired Allen & Company of Florida. In 2020, it acquired the assets of E.K. Riley Investments, Lucia Securities and Blaze Portfolio. In 2021, the company acquired Waddell & Reed's wealth management business.
As of Jun 30, 2022, LPL Financial had total advisory assets of $558.6 billion and brokerage assets of $506 billion. As of the same date, it had cash and cash equivalents of $700.4 million, total assets of $7.74 billion and shareholders’ equity of $1.84 billion.
Bottom Line
Anyone can invest, but building a successful investment portfolio requires research, patience, and a little bit of risk. So, if you had invested in LPL Financial Holdings Inc. ten years ago, you're likely feeling pretty good about your investment today.
A $1000 investment made in October 2012 would be worth $8,138.57, or a 713.86% gain, as of October 6, 2022, according to our calculations. Investors should note that this return excludes dividends but includes price increases.
In comparison, the S&P 500 gained 158.96% and the price of gold went up -7.42% over the same time frame.
Analysts are forecasting more upside for LPLA too.
Shares of LPL Financial have outperformed the industry over the past year. Its earnings outpaced the Zacks Consensus Estimate in each of the trailing four quarters. Strategic acquisitions, including the buyout of Waddell & Reed's wealth management business, will likely keep supporting the company's financials. Moreover, solid advisor productivity and recruiting efforts are expected to keep aiding advisory revenues. Further, LPL Financial's efficient capital deployment activities reflect a solid balance sheet position. However, elevated operating expenses mainly due to higher compensation and benefits expenses might hurt profits to an extent. Uncertainty regarding the performance of the capital markets and the presence of substantial amounts of goodwill on the company’s balance sheet are other woes, which make us apprehensive.
Over the past four weeks, shares have rallied 7.86%, and there have been 3 higher earnings estimate revisions in the past two months for fiscal 2022 compared to none lower. The consensus estimate has moved up as well.