Bloomberg Anywhere Remote Login Bloomberg Terminal Demo Request


Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.


Financial Products

Enterprise Products


Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000


Industry Products

Media Services

Follow Us

Bloomberg Customers

Businessweek Archives

A Back Office For Mutual Fund Fever

Inside Wall Street


What's the hottest business around? Mutual funds would be a good bet. And one stock that some pros are snapping up is BHC Financial. The Philadelphia company was formed in 1983 to provide trading and clearing services to about 49 banks, including Citicorp and PNC Financial, which have brokerage units that offer mutual funds to the public.

What's intriguing about BHC is that the original investors are themselves clients of the company. PNC Financial and National Bank of Detroit, for instance, each own 4.3%, and PNC alone accounted for 10% of BHC's 1992 revenues. Citicorp, which isn't an original investor, is BHC's largest customer, accounting for 14% of revenues.

Analyst Fred Meinke of Raymond James Financial Group figures that revenues should grow at a 20% rate this year and next. He notes that mutual-fund and insurance companies have started to seek BHC's services, including T. Rowe Price, the large mutual-fund company. BHC, which went public last April at 14, will likely post earnings of $2 a share this year and $2.25 next year.

Now at 20, "the stock remains an undiscovered bargain considering its low price-earnings multiple and high return on equity," says investment manager Jim Awad. Brokerage stocks sell at p-e's as high as 21. Awad thinks BHC should should sell at 15 times estimated 1994 earnings, or 34. With the rapid expansion of its business, including a discount brokerage, BHC is "natural buyout bait," says Awad, particularly for the banking companies that now own stakes in it. "A stock is usually put in play easily when ownership is concentrated in few hands," he notes.GENE G. MARCIAL

blog comments powered by Disqus