Back to top

Analyst Blog

Baltimore-based Legg Mason Inc. (LM - Analyst Report) reported a rise in its assets under management (AUM) as of Mar 31, 2013, compared with the prior quarter, reflecting the acquisition of Fauchier Partners. Preliminary quarter-end AUM came in at $664.6 billion, up 2.4% sequentially. Equity and liquidity AUM were up in the quarter under review, though Fixed Income AUM declined.

Legg Mason’s equity AUM as of March-end jumped 11.2% sequentially to $161.8 billion while liquid assets, which are convertible into cash, increased about 1.0% to $137.7 billion.

Fixed income AUM dipped 0.5% compared with the prior quarter to $365.1 billion. The rise in equity AUM, partly offset by a fall in fixed income AUM, resulted in long-term AUM of $526.9 billion, reflecting a 2.8% increase against the prior quarter.

Among other investment managers, Invesco Ltd. (IVZ - Analyst Report) announced a 2.2% rise in its preliminary month-end AUM for Mar 2013, which stood at $729.3 billion. Another firm - Franklin Resources Inc. (BEN - Analyst Report) - declared preliminary AUM of $823.7 billion by its subsidiaries for the month of Mar 2013, reflecting an escalation of 1.2% over the prior month.

We believe Legg Mason has the potential to outperform its peers in the long run, given its diversified product mix and leverage to the changing market demography. However, in the near term, asset outflows will remain a significant headwind. Yet, owing to the restructuring initiatives and the cost-cutting measures, we expect operating efficiencies to improve for Legg Mason and dividend payments to continue to inspire investors’ confidence in the stock.

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 59 cents per share. The Zacks Earnings ESP (Read: Zacks Earnings ESP: A Better Method) for Legg Mason is +18.64% for the fourth quarter. This, along with its Zacks Rank #3 (Hold), makes us confident for the company to report a positive earnings surprise.

Among other asset managers, we are not confident of an earnings beat from AllianceBernstein Holding L.P. (AB - Snapshot Report) with an Earnings ESP of 0.00% and a Zacks Rank #1 (Strong Buy).

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

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 Zacks.com. 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
ERBA DIAGNO… ERB 3.55 +11.64%
CHINA BIOLO… CBPO 55.57 +7.40%
BITAUTO HOL… BITA 94.76 +4.06%
LUXOFT HOLD… LXFT 38.77 +3.64%
INSITE VISI… INSV 0.30 +3.41%