T. Rowe Price Group, Inc. (TROW) Could Benefit From Market Turmoil

Page 1 of 2

T. Rowe Price Group, Inc. (NASDAQ:TROW) isn’t the best-known investment management company in the industry, but with more than half a trillion dollars under management, the company has a long history of serving its mutual-fund customers well. For T. Rowe Price Group, Inc. (NASDAQ:TROW) stock, the benefits of the long bull market in stocks and the forward-thinking nature of its no-load fund strategy have helped boost the company’s bottom line, and even as the competitive threat of exchange-traded funds have weighed on mutual-fund managers throughout the industry, recent market turmoil could give the company a chance to regain some of those who fled actively managed funds during the financial crisis. Let’s take a closer look at T. Rowe Price Group, Inc. (NASDAQ:TROW) to find out what’s been happening with it lately and how its stock can move higher.

T. Rowe Price Group, Inc.

Asset management: a winning business model
Shareholders of T. Rowe Price Group, Inc. (NASDAQ:TROW) and its peers have found that investing in asset management companies directly can be an even more lucrative proposition than investing in the funds that they offer. T. Rowe Price Group, Inc. (NASDAQ:TROW) stock has seen dramatic long-term growth, with average annual returns exceeding 20% over the past two decades.

The reason for that growth is simple: T. Rowe Price Group, Inc. (NASDAQ:TROW) collects management fees based on the amount of assets it manages. As the long bull market of the 1990s gained momentum, the company boosted its assets, and therefore its income. Meanwhile, even when bear markets temporarily sent its stock downward, T. Rowe Price rapidly recovered from those declines and started heading higher when the next advance for the stock market began.

Lately, though, T. Rowe Price hasn’t benefited as much from share-price gains. Competitor Invesco Ltd. (NYSE:IVZ) has managed to expand its margins and produce growth among its current lineup of funds, with exposure to a big range of markets that leaves it broadly placed to serve its customers’ needs. But for T. Rowe Price and peer Federated Investors Inc (NYSE:FII), investors haven’t been putting as much money to work in their funds as analysts had expected to see, and that has led to some growth shortfalls. Federated Investors Inc (NYSE:FII) in particular missed its earnings estimates in its most recent quarter, and analysts see growth there slowing to just 3%. T. Rowe Price has better prospects, retaining its double-digit revenue growth, but after a substantial move upward at the beginning of the year, its stock has treaded water.

Page 1 of 2
blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months Click to see monthly returns in table format!

Lists

The Top 10 States With Fastest Internet Speeds

10 Best Places to Visit in USA in August

Top 10 Cities to Visit Before You Die

Top 10 Genetically Modified Food In the US

15 Highest Grossing Movies Opening Weekend

5 Best Poker Books For Beginners

10 Strategies Hedge Funds Use to Make Huge Returns

Top 10 Fast Food Franchises to Buy

10 Best Places to Visit in Canada

Best Summer Jobs for Teachers

10 Youngest Hedge Fund Billionaires

Top 10 One Hit Wonders of the 90s

Fastest Growing Cities In America

Top 10 U.S. Cities for Freelancers

Top 9 Most Popular Free iPhone Apps

Top 10 Least Expensive Private Business Schools in the US

Top 15 Most Expensive Countries in the World – 2014

Top Businesses to Invest In

Top 5 Things You Might Be Doing Wrong With Your Business

Top 5 Strategic Technology Trends in 2014

Top Rags to Riches Stories

Parenting Behavior That Promotes Future Leaders

Top 5 Mistakes Made by Small Businesses

Top 5 Most Common and Potentially Devastating Financial Blunders

Top 5 Highest Paying Jobs for Web Designers

Top 6 Most Respected Professions that Also Pay Well

Top 5 Pitfalls Investors Should Avoid

Top 6 Lawyers and Policy Makers Under 30

Top 6 New Year’s Resolutions for Entrepreneurs

Top 7 Locations to Check in on Facebook

Top 5 Mistakes made by Rookie eBay Sellers

Top 7 eBook Publishers in 2013

Top 6 Health Industry Trends in 2014

5 Lessons for Entrepreneurs from Seth Godin

Top 5 Success Tips from Jordan Belfort – the Wolf of Wall Street

Best Master’s in Finance Degree Programs

Top 6 Earning Celebrities Over 50

The most expensive sports to play

Top 7 Earning Celebrities Under 25

Best 7 Online Courses to Take: Free Finance MOOCs

Top 6 Bad Habits that Promote Failure

20 Most Valuable Soccer Teams in the World in 2013

12 Most Expensive Countries for Foreign Students

Top 30 Most Influential Women in the World

Top 20 Most Expensive New Year Eve Shows

Top 5 Best Vocational Careers

Top 10 Jobs for 2014 by Salary Gain (Predictions)

Top 5 Digital Trends for 2014

Top 6 Things You Can Do To Increase Your Productivity

Top 9 Trending Smartphones in 2013

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!