Andrew Cannarsa, The Examiner
2007-10-15 07:00:00.0
Current rank: Not ranked

BALTIMORE -

As fears of the U.S. credit crunch subsided, T. Rowe Price Group and other investment management firms experienced strong gains in September and October.

“There was a lot of concern about the credit crunch in the U.S. market, especially in July and August,” said Andrew Richards, an analyst who follows Baltimore-based T. Rowe Price for Morningstar, a Chicago-based investment research firm.

“Now, those concerns have kind of passed,” Richards said. “As the market goes up, investment firms’ assets and management goes up.”

Shares of T. Rowe Price last week were trading at prices more than 15 percent higher than a month ago. The firm’s stock price reached a 52-week high last week, and since the beginning of the year, T. Rowe Price’s share price has increased more than 30 percent.

This is all great news for T. Rowe Price and its investors, though Richards warned potential future market volatility could affect the firm in the long run.

“I would estimate that between 85 percent and 90 percent of its funds go into U.S. securities, so T. Rowe Price, more than a diversified money management firm, is going to be affected by the market,” Richards said.

“We like the model and we think it’s a great business, but not at its current price,” he added.

As of June 30, T. Rowe Price managed almost $380 billion in assets for individuals and some of the world’s leading corporations, public retirement plans and foundations.

The firm totaled $551 million in net revenue and $162 million in net income in the second quarter of 2007. T. Rowe Price’s third-quarter results should be reported in the coming weeks.

“Looking ahead, the U.S. economy continues to grow moderately, and global economic growth is likely to remain favorable in the near term,” James A.C. Kennedy, president and CEO of T. Rowe Price, said in a statement. “This should be supportive of good corporate earnings growth.”

T. Rowe Price is part of The Examiner Top 10, a portfolio of some of the largest publicly traded companies in the Baltimore region.

acannarsa@baltimoreexaminer.com