There is something very meta about investing in an investment company.
For investors, this can often be a way to side-invest in the market itself. When it works, it can work really well, which is why real-money columnist Paul Price recently reviewed T. Rowe Price (TRUE) – Get T. Rowe Price Group Report.
“T. Rowe Price Investment Management Company is a debt-free, well-managed company. As of Nov. 30, 2021, it had approximately $1.63 trillion in assets under management, Price wrote on Real Money.
“Market-linked companies are often quite volatile as they react quickly to changes in stock market moods. Buying the right ones, after steep declines, is almost universally rewarded for investors willing to buck the tide.”
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An investment firm will earn returns based on the strength of the overall market, adjusted by the trading and business practices of the firm itself. When you like the way the company does business, it can be a magnifying glass of value. Their investment strategy or products can enhance strong markets and protect against bad ones, generating more profitable returns than the market alone could.
“That appears to be the case currently,” Price wrote. “TROW traded as high as $224.56 last August and changed hands near $199 as recently as January 3. As of Feb. 4, those same shares were available at just $148.70. (In the weeks following the start of the Russian invasion of Ukraine, stocks fell along with the rest of the market. They closed at $139.39 on March 15.)
“T. Rowe Price is a proven vehicle for long-term growth. If the already slightly reduced 2022 estimate proves accurate, EPS will still have grown by around 264% over the past decade,” Price said.
Real Money gives you the opportunity to hear from more than two dozen market professionals, fund managers and financial analysts.
Paul Price joined Merrill Lynch in 1987 and over the next 13 years worked with AG Edwards, Wheat First and Ferris, Baker Watts. Dr. Price was successful enough to retire in October 2000, but continues to write and give investment seminars.