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Waddell & Reed Financial, Inc.

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Waddell & Reed's shares significantly underperformed the Zacks categorized Investment Management industry in the last one year. Estimates have been going down ahead of the company’s second-quarter 2017 earnings release. The company has mixed record of earnings surprises in recent quarters. Continued pressure on revenues is expected to hamper its profitability in the near term. Also, the company has substantial intangibles on its balance sheet, which are subject to impairment. Hence, any heavy market turmoil could adversely impact its net inflows. Nevertheless, a consistent decline in expenses continues to be a positive for the company. Further, the company’s initiatives through Project E should help in boosting top-line growth in the long run.

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