- The Washington Times - Monday, November 28, 2005

Stock of T. Rowe Price, a Baltimore investment-management firm, was swept up in a general stock market decline yesterday as investors learned of tepid retail sales during the first weekend of holiday shopping.

The stock price fell 88 cents to close at $72.98 on the Nasdaq Composite Index. The Standard & Poor’s 500 Index was down 10.79 to close at 1257.46.

But over the past four weeks, T. Rowe and other asset-management firms have been on the rise. T. Rowe is still up about $8 over the past four weeks.

Analysts say the increase can be attributed to the overall equity market, which has been on the rise since mid-October. The S&P; 500 has gained 80 points since mid-October, excluding yesterday’s dip.

“[Asset-management companies] had a huge rebound since the October lows,” said Matt Snowling, a senior analyst at Friedman, Billings, Ramsey & Co. Inc. in Arlington.

“That’s probably what’s driving most of the rebound in T. Rowe.”

Friedman has a business relationship with T. Rowe Price.

Last month, T. Rowe Price reported net income for its third quarter ended Sept. 30 rose 41 percent to $116.3 million (85 cents per diluted share) from $82.5 million a year ago (62 cents).

The company’s third-quarter earnings beat Wall Street estimates by 3 cents and have also been a factor in the stock’s rise.

“Earnings have been good, business has been pretty good, and the underlying markets have been good,” said Robert A. Lee, senior vice president of research at Keefe, Bruyette & Woods in New York of T. Rowe Price’s four-week stock price increase.

“That puts wind in their sails, so to speak. More broadly, there has been investors attracted to the group for those reasons.”

Keefe also has a business relationship with T. Rowe Price.

Mr. Snowling said T. Rowe Price is a good long-term investment, but cautions new investors that it may not be the best entry point.

“T. Rowe has one of the best suites of funds in terms of performances and one of the highest margins among asset managers,” Mr. Snowling said.

The analysts have the company’s stock rated at a “market perform” or “hold” level.

Analysts expect T. Rowe Pricee’s climb to continue.

“We expect them to have another solid quarter in terms of positive new money coming into the company to manage,” Mr. Lee said.

JP Morgan, a New York equity-research firm, reports that T. Rowe Price’s retirement investment savings programs put the company in a good position for the future.

“We believe T. Rowe’s diverse product offering, ties to the retirement market and strong performance track record will all help drive healthy organic [assets under management] growth over the next few years,” analyst Patra Chakshuvej said in a recent report.

In addition, T. Rowe Price is coming up on the first of the year, when investors typically dump a lot of money in 401(k) and individual retirement savings accounts, making it the company’s strongest season, Mr. Snowling said.

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