Federated Investors Inc. Reports Operating Results (10-K)
Federated Investors Inc. has a market cap of $2.88 billion; its shares were traded at around $27.95 with a P/E ratio of 17.25 and P/S ratio of 3.02. The dividend yield of Federated Investors Inc. stocks is 3.43%. Federated Investors Inc. had an annual average earning growth of 1% over the past 10 years.Hedge Fund Gurus that owns FII: Bruce Kovner of Caxton Associates, Paul Tudor Jones of The Tudor Group, Steven Cohen of SAC Capital Advisors. Mutual Fund and Other Gurus that owns FII: Tweedy Browne of Tweedy Browne CO LLC, Chuck Royce of Royce& Associates, Tom Gayner of Markel Gayner Asset Management Corp, John Keeley of Keeley Fund Management, David Dreman of Dreman Value Management, Richard Aster Jr of Meridian Fund, Mario Gabelli of GAMCO Investors.
Highlight of Business Operations: The aggregate market value of the Class B Common Stock held by non-affiliates of the registrant as of June 30, 2010 was approximately $1.8 billion, based on the last reported sales price of $20.71 as reported by the New York Stock Exchange. For purposes of this calculation, the registrant has deemed all of its executive officers and directors to be affiliates, but has made no determination as to whether any other persons are affiliates within the meaning of Rule 12b-2 under the Securities Exchange Act of 1934. The number of shares of Class A and Class B Common Stock outstanding on February 16, 2011, was 9,000 and 104,037,459, respectively.
Of the 136 Federated Funds as of December 31, 2010, Federateds investment advisory subsidiaries managed 49 money market funds totaling $244.8 billion in assets under management, 50 fixed-income funds with $31.9 billion in assets under management and 37 equity funds with $22.6 billion in assets under management.
During 2010, fee waivers to maintain positive or zero net yields totaled $241.6 million and were partially offset by a related reduction in distribution expenses of $186.6 million such that the net impact to Federated was $55.0 million in reduced operating income. The impact of these fee waivers for 2010 was significantly more than the impact for 2009 with $120.6 million in waived fees, $86.4 million in reduced distribution expenses and a net impact on operating income of $34.2 million and the impact for 2008 with $3.6 million in waived fees, $1.9 million in reduced distribution expenses and a net impact on operating income of $1.7 million. (See Note (24) to the Consolidated Financial Statements for information regarding the quarterly operating income impact of the fee waivers.) Management expects the fee waivers and the related reduction in distribution expense will continue into 2011 and will likely be material. Management does not expect the quarterly operating income impact from these waivers for the first quarter of 2011 to change materially from the $12.3 million experienced in the fourth quarter 2010. These fee waivers are expected to decrease over time as the market begins to factor in the potential for increases in short-term interest rates and then again when the Federal Reserve begins to increase interest rates. Management estimates that an increase of 10 basis points in gross yields on securities purchased in money market fund portfolios will likely reduce the operating income impact of these waivers by about one-third from the current levels and a 25-basis-point increase would reduce the impact by about two-thirds. The actual amount of future fee waivers could vary significantly from managements estimates as they are contingent on a number of variables including, but not limited to, available yields on instruments held by the money market funds, changes in assets within money market funds, actions by the Federal Reserve and the U.S. Department of the Treasury, changes in expenses of the money market funds, changes in the mix of money market customer assets and Federateds willingness to continue the fee waivers.
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