Zacks Investment Research lowered shares of Waddell & Reed (NYSE:WDR) from a strong-buy rating to a hold rating in a report issued on Friday.
According to Zacks, “Waddell & Reed's shares have underperformed the industry over the last three months. Yet, the company has an impressive earnings surprise history, having surpassed the Zacks Consensus Estimate in three of the trailing four quarters. Estimates have been stable lately ahead of the company's first-quarter 2018 earnings release. As the company is making efforts to improve efficiency and optimize its operations, expenses are likely to trend lower in the next few quarters, thereby supporting bottom-line growth. Further, its initiatives through Project E are likely to boost top-line growth in the long run. However, pressure on revenues, mainly because of lower sales volumes and a tough operating environment remains a major concern. Also, muted growth in assets under management (AUM) is likely to hamper its financials in the near term.”
WDR has been the subject of a number of other reports. Royal Bank of Canada reissued a sell rating and issued a $20.00 price target on shares of Waddell & Reed in a report on Wednesday, January 31st. Keefe, Bruyette & Woods reaffirmed a hold rating and set a $23.00 target price on shares of Waddell & Reed in a research note on Friday, December 22nd. Jefferies Group reaffirmed a hold rating and set a $23.00 target price on shares of Waddell & Reed in a research note on Thursday, January 11th. Morgan Stanley reduced their target price on Waddell & Reed from $21.00 to $19.00 and set an underweight rating for the company in a research note on Tuesday, April 10th. Finally, Bank of America set a $20.00 target price on Waddell & Reed and gave the stock a sell rating in a research note on Tuesday, January 30th. Five analysts have rated the stock with a sell rating, four have assigned a hold rating and one has issued a buy rating to the stock. The stock currently has a consensus rating of Hold and a consensus target price of $21.50.
Waddell & Reed (NYSE:WDR) last announced its quarterly earnings results on Tuesday, January 30th. The asset manager reported $0.48 earnings per share (EPS) for the quarter, beating the Zacks’ consensus estimate of $0.45 by $0.03. Waddell & Reed had a return on equity of 16.63% and a net margin of 10.72%. The company had revenue of $294.48 million during the quarter, compared to the consensus estimate of $286.55 million. During the same period in the previous year, the company posted $0.43 earnings per share. Waddell & Reed’s revenue for the quarter was up .5% on a year-over-year basis. sell-side analysts anticipate that Waddell & Reed will post 2.23 EPS for the current year.
The firm also recently announced a quarterly dividend, which will be paid on Tuesday, May 1st. Stockholders of record on Tuesday, April 10th will be paid a dividend of $0.25 per share. This represents a $1.00 annualized dividend and a dividend yield of 5.02%. The ex-dividend date of this dividend is Monday, April 9th. Waddell & Reed’s payout ratio is 52.08%.
In other news, Director Jerry W. Walton sold 5,792 shares of the company’s stock in a transaction that occurred on Thursday, February 1st. The stock was sold at an average price of $22.95, for a total transaction of $132,926.40. Following the completion of the transaction, the director now directly owns 81,332 shares of the company’s stock, valued at approximately $1,866,569.40. The sale was disclosed in a filing with the SEC, which is available at this link. Corporate insiders own 3.40% of the company’s stock.
Hedge funds have recently made changes to their positions in the company. Victory Capital Management Inc. increased its position in shares of Waddell & Reed by 6.5% during the fourth quarter. Victory Capital Management Inc. now owns 37,889 shares of the asset manager’s stock worth $846,000 after purchasing an additional 2,299 shares in the last quarter. American International Group Inc. increased its position in shares of Waddell & Reed by 5.7% during the third quarter. American International Group Inc. now owns 64,646 shares of the asset manager’s stock worth $1,297,000 after purchasing an additional 3,480 shares in the last quarter. Asset Management One Co. Ltd. increased its position in shares of Waddell & Reed by 14.8% during the third quarter. Asset Management One Co. Ltd. now owns 29,859 shares of the asset manager’s stock worth $594,000 after purchasing an additional 3,846 shares in the last quarter. Assetmark Inc. purchased a new stake in shares of Waddell & Reed during the fourth quarter worth approximately $103,000. Finally, Fisher Asset Management LLC increased its position in shares of Waddell & Reed by 0.3% during the fourth quarter. Fisher Asset Management LLC now owns 1,929,598 shares of the asset manager’s stock worth $43,107,000 after purchasing an additional 5,515 shares in the last quarter. 97.43% of the stock is owned by institutional investors and hedge funds.
Waddell & Reed Company Profile
Waddell & Reed Financial, Inc, through its subsidiaries, provides investment management and advisory, investment product underwriting and distribution, and shareholder services administration to mutual funds, and institutional and separately managed accounts in the United States. The company acts as an investment adviser for institutional and other private investors, and provides sub advisory services to other investment companies; and underwrites and distributes registered open-end mutual fund portfolios.
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