T. Rowe Price
Group Inc. provides investment advisory and administrative services to an
assortment of no load funds, sponsored investment products and private
accounts. The company has generated an 18-20%+
return on equity and a 15% growth rate in earnings and dividends over the 10
years. While TROW
is impacted by serious declines in Market prices but it has established a
superior long growth record in profits and dividends which we expected to
continue:
(1) the
excellent track record of its funds as well as recent investor optimism has
increased the value of current assets under management as well as attracting
new customers,
(2) the
introduction of new products such as country funds,
(3) an
aggressive cost cutting program,
(4) stock buy
backs.
Negatives:
(1)
any decline in stock prices will impact assets under
management,
(2)
increasing volatile markets,
(3)
more government regulation,
(4)
a highly competitive industry,
(5)
rising operating costs.
Statistical Summary
Stock Dividend Payout # Increases
Yield Growth Rate Ratio
Since 2004
Ind Ave 2.1
9 29 NA
Debt/ EPS
Down Net Value Line
Equity ROE Since 2004 Margin Rating
Ind Ave 33 19 NA 18 NA
Chart
Note:
TROW stock made great progress off its March 2009 low, surpassing the downtrend
off its September 2008 high (straight red line) and the November 2008 trading
high (green line). Long term, the stock
is in an uptrend (blue lines).
Intermediate term, it recently broke an uptrend and re-set to a trading
range (purple line). The wiggly red line
is the 50 day moving average. The
Dividend Growth and High Yield Portfolios own 50% positions in TROW. The upper boundary of its Buy Value Range is
$53; the lower boundary of its Sell Half range is $133.
9/14
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