Thesis and Overview:
A lot of the asset managers out there look pretty attractive as higher interest rates and an improving economy should help bolster asset inflows, the Fed's taper delay notwithstanding. That said, in this group, one firm stands out as clearly weaker than the rest; Federated Investors Inc. (FII). Compared to peers like BlackRock (BLK), T. Rowe Price (TROW), and State Street (STT), $2.9B market-cap Federated is heavily weighted towards managing money market funds and this is likely to cause problems as the economy strengthens. Yet with FII having risen 35% YTD and trading around $27.50 just shy of its 52-week high of $30.87, investors seem oblivious to this risk...
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