UPDATE: UBS Starts WisdomTree Investments (WETF) at Sell
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(Updated - November 2, 2016 8:37 AM EDT)
UBS initiated coverage on WisdomTree Investments (NASDAQ: WETF) with a Sell rating and a price target of $7. Analyst Brennan Hawken expressed concerns about the company's ability to scale.
"WETF offers nothing but ETFs but we do not view the company as a proxy for the broader ETF market. Specifically, WETF's flows have been very poorly correlated to ETF growth rates over the last few years, however WETF's valuation implies a more optimistic growth rate than we think is likely. In our view the narrow/niche focus of WETF's products and the scale disadvantage of WETF versus its larger competitors are significant obstacles to a rapid recovery in their organic growth outlook. As a result, we do not believe WETF shares should trade at a 300% premium to the traditional AMs when the average over the past few years has been a 190% premium," said Hawken.
Shares of WisdomTree Investments closed at $8.66 yesterday.
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