Back to top

Analyst Blog

On Apr 9, we upgraded asset management firm, Legg Mason Inc. (LM - Analyst Report) to Outperform based on its improved performance. Legg Mason, which focuses on the growth and preservation of its clients' capital through its proprietary mutual funds and separately-managed accounts, has been recording liquidity and equity inflows since the beginning of 2013.

Moreover, with the closure of the acquisition of London-based fund-of-hedge-funds firm - Fauchier, the company is headed toward global expansion.

Why the Upgrade?

Legg Mason is expected to announce its fiscal fourth-quarter 2013 results on Apr 29. The Zacks Consensus Estimate for the quarter is pegged at 61 cents per share. The Zacks Earnings ESP (Read: Zacks Earnings ESP: A Better Method) for Legg Mason is +32.79% for the fourth quarter. This, along with its Zacks Rank #3 (Hold), makes it likely for the company to report a positive earnings surprise.

Over the past 90 days, the Zacks Consensus Estimate for fiscal 2013 jumped 77.6% to $2.77 per share and the Zacks Consensus Estimate for fiscal 2014 increased 28.8% to $2.86 over the same period.

In Mar 2013, Legg Mason and its affiliate, Permal Group, completed the acquisition of London-based fund-of-hedge-funds firm - Fauchier Partners from BNP Paribas Investment Partners. The acquisition is anticipated to be accretive to Legg Mason's earnings in the first year and demonstrates the company’s aim of providing exceptional services to its clients.

Also, Legg Mason reported strong fiscal third-quarter 2013 results, significantly outpacing the Zacks Consensus Estimate. Higher top-line growth, aided primarily by improved investment advisory fees and other revenues acted as a tailwind for the quarter. However, elevated operating expenses acted as a dampener.

Other Stocks to Consider

Besides Legg Mason, other stocks in the same sector that are currently performing well include Apollo Global Management, LLC (APO - Snapshot Report) with a Zacks Rank #1 (Strong Buy), Franklin Resources Inc. (BEN - Analyst Report) and Invesco Ltd. (IVZ - Analyst Report) with a Zacks Rank #2 (Buy).

Please login to or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research


Are you a new Zacks Member or a visitor to

Top Zacks Features

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
TRIQUINT SE… TQNT 20.75 +6.96%
RF MICRO DE… RFMD 12.50 +6.21%
VASCO DATA… VDSI 14.87 +5.39%
CHYRONHEGO… CHYR 2.85 +4.78%
RTI SURGICA… RTIX 5.39 +2.86%