Hedgeye Financials analyst Jonathan Casteleyn is hosting an institutional Black Book presentation to discuss the addition of Franklin Resources (BEN) to his Best Ideas List as a long. The call will be held Tuesday March 7th at 11am ET.
KEY DISCUSSION POINTS
- Performance is improving
We think the asset managers generally understate current performance metrics and in this case, Franklin is putting up a solid recovery in its core mutual fund products. Morningstar ratings have almost improved by 1 full star which has already started a rate of change improvement in its investment flow.
- Emerging Market assets are interesting
While the company is diversified after decades of product development, Emerging Markets (EM) definitely have a higher weighting at BEN than other public proxies. With EM trading at under a <15x Schiller CAPE ratio versus the US at >25x, a shift into non-developed markets will disproportionately benefit the company.
- Putting the resources in Franklin
The company is the best resourced company financially in the sector with almost $10 per share in net cash and a solid cash flow base. We think that the company has all strategic options open to it including a transformative M&A deal as well as continued share repurchases and special dividends.
CALL DETAILS
Ping sales@hedgeye.com for more information. If you are not a current subscriber to our Financials research there will be a fee associated with this call.
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