(November 3 – 13:45 ET) –
Merrill Lynch Canada Inc. is
reiterating its buy recommendation
for Investors Group Inc.

It estimates that the firm will
generate earnings of $1.11 per
share in 1999, up from 89¢ in
1998, and grow to $1.33 in 2000.

IG is stressing “quality, not
quantity” when it comes to hiring
its advisors, says Merrill analyst
Jamie Keating in a report released
today. IG has had its problems
hanging onto advisors in the past.

“Management indicates that they
feel the current market conditions
will bring opportunities to
attract financial planners to
Investors Group…In our
discussions with the company, we
feel that the changes that have
been made in the recruiting process
are resulting in better quality
advisors being added at a slower
rate than experienced in the
past — the company is
focusing on quality as opposed to
quantity,” says Keating.

Apart from the mutual fund sales
force growth, Merrill points to
growth at the firm in areas such
as insurance sales and mortgages.

Keating implies that IG is
undervalued. He says “our analysis
suggests IGI shares represent
exposure to 30% higher Core
Equalized EBITDA margin at a 30%
discount.”

-IE Staff