Analyst Macrae Sykes of Gabelli & Company has always liked Waddell & Reed Financial, Inc.’s (WDR) business, but he says in the last year and a half the company has stumbled. He says this is a reflection of different aspects, and he expects the company to rebound and gain strength in the next several years.
“They’ve had management turnover, whether it was one of their stars leaving their largest funds unexpectedly, retiring, and they also had a manager dismissed for cause, and they’ve had underperformance in their largest fund, the Ivy Asset Strategy. So the firm has been dealing with some unexpected turnover and some underperformance, which led to some outflows last year,” Sykes said.
FOR MORE INFORMATION ON THIS INTERVIEW CLICK HERE.
Sykes says that when a company experiences outflows in the interim basis, the share price is often overly punished, and in his opinion that’s what has happened with Waddell & Reed.
“The franchise is way too cheap based on its outlook and EV/EBITA multiple. We think there is also an asymmetric return aspect to it, because the current return from dividends is about 3%, so good support from income investors,” Sykes said.
“It has some interim headwinds in terms of its business, but we think it will rebound and be stronger than ever within the next several years, and that investors will be well-rewarded,” Sykes added.
Waddell & Reed Financial (WDR) Attracts Investors With Its Ivy Asset Fund
April 09, 2013
BMO Capital Markets REITs Mavens John Kim and Jeremy Metz See REITs Rebound, but only for Specific Names
May 07, 2018
Wells Fargo & Co. (WFC) Expected to Appreciate When Interest Rates Rebound
April 29, 2013
Ginger Ale is Reed’s Inc. (NASDAQ:REED) Bread and Butter
August 13, 2020
Hasbro, Inc. (HAS) Faces Impact from New Xbox and Playstation Consoles as Toys and Games Take a Cyclical Dip
November 14, 2013
