- Expectations of $2B-$5B of quarterly inflows "leave little room for error" for WisdomTree (WETF -6.4%), says Citi's William Katz, who cut the stock to a Sell this morning. Stripping out the spectacular (and likely unrepeatable) success of the Japan Hedged Equity Fund, WisdomTree has hit this range just once in the last two years.
- There are better values in asset management elsewhere, says Katz, noting double-digit organic growth at Waddell and Reed (WDR -0.5%) and Artisan Partners (APAM -0.8%), but at far lower P/Es than WisdomTree's 39x. Then there's Invesco (IVZ -0.5%) - which runs PowerShares ETFs - enjoying margins nearly as large as WETF, but with a P/E ratio more than 50% smaller.
- Is WisdomTree - the only "pure play" ETF stock - deserving of a buyout premium? Maybe not, suggests Katz, noting insider selling, continued heavy investment in the business, and acquirers more interested in "seeking de novo growth in the passive arena."
- Earlier coverage