With over $40 billion in assets under management, WisdomTree's brand enjoys a formidable presence in the asset management segment. Its major rivals include such big names as Invesco , BlackRock and Vanguard. WisdomTree offers 99 exchange rated funds that focus on geographic areas, industries, commodities and other products.
The company's annual sales have grown nearly eight-fold since 2010. To be sure, the stock has dropped 23.72% so far 2016. But that makes it a bargain. ETFs may hold stocks, commodities or other assets and often track a stock or bond index.
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WisdomTree's success stems from its growth not only in the U.S. but also Europe and Asia.
In recent years, ETFs have gained in popularity as consumers seek to limit their risks and focus on areas with which they may be familiar. ETFs have lower expense ratios, superior tax efficiencies, and unpretentious trading mechanics compared to traditional mutual funds.
Analysts expect WisdomTree to bring in 14%+ earnings per share (EPS) growth next year, following 5% top-line growth. This pace of projected EPS growth is higher than some peers including asset manager Franklin Resources.
WisdomTree's competitive strengths include its positions in large, growing markets, strong product performance, varied products, self-indexing capabilities and an efficient business model with a lower risk profile.
The landslide victory for Japan's LDP, which pushed down the yen, is welcome news for WisdomTree's Japan hedged equity fund DXJ.
More recently, Jefferies alluded to the possibility of WisdomTree being a buyout candidate, and even suggested that Franklin Resources or T. Rowe Price could purchase the ETF/ETP manufacturer. WisdomTree's products via its strong distribution network should mesh well for the right buyer.
WisdomTree's shares should gather momentum in the second half of this year and deliver solid returns.
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This article is commentary by an independent contributor. At the time of publication, the author held no positions in the stocks mentioned.