Hold - Price 30.91 on Oct. 27
by Sandler O'Neill & Co.

Despite strong 3Q09 results across [assets under management] and net flows, we're reiterating our Hold rating, as we think the [asset manager's] stock is trading around fair value. At 17 times to 18 times our revised EPS estimate for next year, or about in line with peer average, we think WDR's multiple reasonably reflects the firm's best-in-class organic growth versus a lack of scale, and below-average margins/operating leverage. Market cap: $2.6 billion.

"It's a bittersweet recognition," says Mike Avery, chief investment officer at Waddell and Ivy Investment Management, which placed ninth. "People don't pay us to lose money," he says. Waddell funds are sold exclusively by the in-house sales team; the Ivy Funds, which are nearly identical to those in the Waddell & Reed lineup, are sold via third parties. The flagship Waddell & Reed Advisors Asset Strategy Fund (WBASX) dropped 26% last year. "We'll continue to be defensive," says Avery, whose Waddell family ranks first for five-year performance. "We expect equity markets to be in a narrow trading range and will manage accordingly," he says, meaning "nimble, flexible stock-picking, because sectors and industries won't bail you out."

of 15, a PEG of 0.96, and it pays a yield of 3.1%.

10/1/2008

Outperform - Price 32.89 on Jan. 29
by Friedman Billings Ramsey

Upgrading from Market Perform...to reflect our forecast of continued net-inflow growth and improving margins...raising target by $2, to 38, or 15 times our 2009 estimate. [Waddell & Reed Financial is a holding company with three major subsidiaries: W&R, nationwide distributor and underwriter for the shares of mutual funds and distributor of insurance products issued by Nationwide Financial Services; W&R Investment Management advisory; and transfer-agency and accounting services for mutual funds and shareholders.] Market-cap: $2.7 billion.

10.9

Downgraded by AG Edwards from Buy to Hold