AMG shares slip after Wachovia downgrades

Shares of Affiliated Managers Group Inc. declined Tuesday after a Wachovia Capital Markets analyst downgraded the asset-management company, saying the flow of cash in its mutual funds is likely to weaken.

AMG stock fell $1.14 to $97.17 in afternoon trading after touching as low as $92.66 earlier in the session.

Douglas Sipkin cut the Prides Crossing, Mass., company to "Market Perform" from "Outperform" in a client note Tuesday. Although May was the best month for equity mutual fund flow since April 2007, he said, performance will weaken in the near term amid concerns over credit quality and record-high oil prices.

About 75 to 80 percent of the company's investments are in equities, Sipkin said.

"Flows are largely driven by performance and market sentiment," Sipkin wrote. "While performance remains fairly healthy, we see no (AMG) affiliate that will drive material flows in a tough environment."

The analyst cut his valuation range on the stock to between $98 and $102 from between $105 to $108.

Sipkin recommended T. Rowe Price Group Inc. and BlackRock Inc., both of which he rates "Outperform," saying their assets are better positioned to weather the weaker markets.

An AMG spokeswoman said the company declined to comment on the report.

Shares of AMG have traded between $77.59 and $136.51 in the last 52 weeks.