ETF pure play premiere
- July 26th, 2011
Wall Street loves pure plays.
A little while back we talked about the wave of spinoffs that were at hand. Now Wall Street can drool over a pure play on the rapidly growing ETF industry. WisdomTree Investments ($WETF) moved today from the Pink Sheets onto the Nasdaq making it investable for a big swath of the industry.
There are a number of publicly traded companies that sponsor ETFs including Blackrock ($BLK), State Street ($STT) and even Charles Schwab ($SCHW). However WisdomTree is the only pure play on ETFs. WisdomTree now becomes a valuation benchmark against which other ETF providers can measure the value of their own businesses. The company will likely be a much rumored takeover target as mainline investment managers look to enter the ETF business.
Just because a company is a pure play does not mean guaranteed success. When the CBOE ($CBOE) went public we thought it would maintain its premium valuation based on its scarcity value. That call has not worked out to-date.
Murray Coleman at Focus on Funds has post up relaying a research note from Citi on WidsomTree. Please note that WisdomTree reports earnings on Thursday. Please note the stock is trading up on the day at new highs and is up substantially from its 52-week low of $1.75.
The bottom line is that investors interested in the ETF space should keep an eye on WisdomTree Investments because pure plays on rapidly growing industries are few and far between these days.
*No position in any stocks mentioned.
Update: Bloomberg TV interview with WisdomTree CEO Jonathan Steinberg and Chairman Michael Steinhardt.
Abnormal Returns is a participant in the Amazon Services LLC Associates Program, an affiliate advertising program designed to provide a means for sites to earn advertising fees by advertising and linking to Amazon.com. If you click on my Amazon.com links and buy anything, even something other than the product advertised, I earn a small commission, yet you don't pay any extra. Thank you for your support.
The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.
Abnormal Returns has over its seven-year life become a fixture in the financial blogosphere. Over thousands of posts we have striven to bring the best of the financial blogosphere to readers. In that time the idea of a “forecast-free investment blog” remains as useful as it did six years ago. More »
- Sunday links: slow money
- Top clicks this week on Abnormal Returns
- Saturday links: unavoidable risks
- Friday links: stark-raving lunacy
- Podcast Friday: feeling fresh
- Thursday links: a potentially false doctrine
- A perfect example of the behavior gap at work
- Wednesday links: consistent outperformers
- Should you buy what Tony Robbins is selling?
- Finance and digital journalism: Charlie Rose edition