Waddell & Reed Financial Inc. Reports Operating Results (10-K)

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Feb 25, 2011
Waddell & Reed Financial Inc. (WDR, Financial) filed Annual Report for the period ended 2010-12-31.

Waddell & Reed Financial has a market cap of $3.42 billion; its shares were traded at around $40.05 with a P/E ratio of 21.9 and P/S ratio of 4.1. The dividend yield of Waddell & Reed Financial stocks is 2%. Waddell & Reed Financial had an annual average earning growth of 6.2% over the past 5 years.Hedge Fund Gurus that owns WDR: Kenneth Fisher of Fisher Asset Management, LLC, Louis Moore Bacon of Moore Capital Management, LP, Bruce Kovner of Caxton Associates, Steven Cohen of SAC Capital Advisors. Mutual Fund and Other Gurus that owns WDR: David Dreman of Dreman Value Management, John Keeley of Keeley Fund Management, Jeff Auxier of Auxier Focus Fund, Mario Gabelli of GAMCO Investors, Chuck Royce of Royce& Associates.

Highlight of Business Operations:

Over the past several years, we have instituted more stringent production requirements for our sales force, which has resulted in a steady decline in our number of advisors. However, gross sales have not declined over this period and this channel produced more in 2010 with 14% fewer advisors, on average, compared to 2009. We utilize gross revenue per advisor to measure advisor productivity. For purposes of this measure, gross revenue consists of front-end load sales and distribution fee revenues, as would be received from an underwriter, from sales of both our Funds and other mutual funds. It also includes fee revenues from our asset allocation products and financial plans, and commission revenues earned on insurance products. Gross revenue per advisor was $119 thousand, $93 thousand and $103 thousand for the years ended December 31, 2010, 2009 and 2008, respectively.

Our Wholesale channel consists of sales garnered through various third-party distribution outlets and Legend advisors. As a result of an increased demand for our funds in the Wholesale channel due to strong investment performance and effective sales efforts, our assets under management from the Wholesale channel have increased to $40.9 billion at December 31, 2010, including $5.7 billion in assets at December 31, 2010 that are subadvised by other managers.

Pursuant to the requirements of the Securities Investor Protection Act of 1970, W&R and LEC are members of the Securities Investor Protection Corporation (the "SIPC"). IFDI is not a member of the SIPC. The SIPC provides protection against lost, stolen or missing securities (but not loss in value due to a rise or fall in market prices) for clients in the event of the failure of a broker/dealer. Accounts are protected up to $500,000 per client with a limit of $100,000 for cash balances. However, since the Funds, and not our broker/dealer subsidiaries, maintain customer accounts, SIPC protection would not cover mutual fund shareholders.

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