Insurance offsets T. Rowe’s mistake

Article Excerpt

T. ROWE PRICE GROUP INC. $74 (Nasdaq symbol TROW; Aggressive Growth and Income Portfolios, Finance sector; Shares outstanding: 248.2 million; Market cap: $18.4 billion; Price-to-sales ratio: 4.3; Dividend yield: 2.9%; TSINetwork Rating: Average; www.troweprice.com) sells mutual funds and wealth management services. Through the mutual funds it manages, T. Rowe Price held shares in Dell Inc. In 2013, it opposed a plan by the computer maker to become a private company. However, it mistakenly voted in favour of the deal. In 2016, a court ruled that Dell and its partners underpaid for the company. But because T. Rowe Price voted for the deal, its clients will not receive any additional funds from Dell. To compensate those clients for its error, in June 2016, T. Rowe Price contributed cash to those funds that held Dell shares. The move increased their net asset value per unit. Those payments also cut the company’s earnings by $166.2 million. However, T. Rowe Price recently announced that insurance will cover…