On the surface WisdomTree Investments (NASDAQ:WETF) appears to be a rapidly growing company that justifies its lofty valuation of 60-times trailing earnings, 17-times sales, and 24-times book value. In fact the company's revenues doubled from the third quarter of 2012 to the third quarter of last year. Profits more than tripled during the same time frame.
While investors don't expect growth to continue at break-neck speed, they do foresee profit growth exceeding 50% in the next year. This is due to secular growth in the ETF market generally, and the company's track record of launching innovative ETFs--most notably the Japan Hedged Equity Fund (NYSEARCA:DXJ).
However, I think that the company's 2013 growth was largely the result...
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