Below is a note from Hedgeye CEO Keith McCullough on why we're adding Franklin Resources (BEN) to the long side of Investing Ideas today:
"Looking to get longer of The Financials, on red? I am.
This morning Jonathan Casteleyn hosted a bullish Best Ideas (Institutional Research product) call on asset manager Franklin Resources (BEN). Our presentation outlined the subtle turn up in BEN's core performance and flow metrics:
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.
Putting the Resources in Franklin: The company is the best resourced company financially in the sector with ~$12 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."