WisdomTree Swings to Slight Quarterly Profit
May 1st 2011 at 6:05am by Tom Lydon
Exchange traded fund (ETF) provider WisdomTree (Pink Sheets: WSDT) said it swung to a slight quarterly profit, which could boost interest in the stock, which trades on the pink sheets, following a recent run.
The firm reported net income of $0.2 million for the first quarter of 2011, compared with a net loss of $3.6 million in the first quarter of 2010 and a net loss of $0.6 million for the fourth quarter of 2010. [March ETF Performance Report.]
ETF assets under management reached a record $11.3 billion, up 14.1% from December 31, 2010. Net inflows were $1.3 billion in the first quarter which represented 4.7% market share of industry inflows. [ETF Growth Continues in First Quarter.]
WisdomTree CEO Jonathan Steinberg commented the firm is “continuing to expand and diversify our product offering by launching our second international fixed income ETF and launching our first alternative strategy ETF during the quarter.”
As of April 1, the company had $11.3 billion in managed ETF assets and $750 million of third-party licensed indexes, according to a recent report on WisdomTree by Gabelli & Co. It estimates the company will generate revenue of $76 million in 2011.
The Gabelli & Co. report also noted WisdomTree at the end of March filed a Form 10 announcing its intention to list on a major U.S. exchange. “We believe the increased trading liquidity and stricter reporting standards, from the expected June movement to a major exchange is a near term catalyst for the company,” the analysts wrote. They count WisdomTree as the eighth-largest ETF sponsor. “The company is capitalizing on the demand for currency and commodity funds.”
Sterne Agee analyst Jason Weyeneth in a note said WisdomTree reported positive GAAP earnings for the first time in company history as well as growing cash earnings. The analyst said product flows, revenue and trends in assets under management are the big drivers of the stock.
WisdomTree has seen its shares jump over the past year on the pink sheets. The company’s chief executive is Jonathan Steinberg, son of financier Saul Steinberg. Finance professor Jeremy Siegel serves as an advisor, and iShares alum Bruce Lavine is chief operating officer.
Michael Steinhardt, who servers as chairman, brings name recognition for his legendary success as a hedge fund manager.
WisdomTree recently said it will change the investment objectives, strategies and fund names for eight ETFs, according to a press release.
Tisha Guerrero and John Spence contributed to this article.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.