T. Rowe Price Group, Inc. (TROW)

NetscribeFinServ (< 20) Submitted: 2/09/07 7:23 AM : Start Price: $48.64 TROW Score: 3.90

T. Rowe Price is a global investment management firm committed to meeting the needs of institutional and individual investors worldwide. It provides a broad array of services ranging from mutual funds, sub-advisory services, and separate account management to other retirement plans. T. Rowe Price investment approach strives to achieve superior performance but is always mindful of the risks incurred relative to the potential rewards.

T. Rowe Price finished the year 2006 with assets under management (AUM) rising 8.6% to $334.7 billion supported by strong net flows of $6.3 billion combined with market appreciation of $20.3 billion. The performance of its mutual fund is impressive with solid product presence across all key asset classes and styles. Reflecting the same its Investment advisory fees increased by 22% and philosophically sold no load funds without any commission.

The company is very conservative in its approach avoiding hedge fund and private equity offerings and investing more in people and systems. The non-capital intensiveness of the business is reflected by the negligible debt and huge pile of cash, which might help in acquisitions. It is also trying to expand globally deriving about 7% of its business from non-U.S. countries after having opened offices in Australia, Sweden and also advising Daiwa SB Investments in which it has a 10% stake. T. Rowe Price sees growth prospects with reforms being made in the U.S. Pension bills. Endorsing the same more than two thirds of the assets managed are retirement related. The automatic enrolment route attracts more 401 (K) customers who also turn out to be loyal customers with high retention rate. More than 80% of the AUM are of equities, which are supported by a strong global capital markets. The company’s prospects look good and is a promising buy.

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