Nuveen Takeover Makes Legg Mason and Federated Look Cheap 2 comments
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I think other asset management companies look starkly cheap in the light of this transaction.
Readers are aware of our positive views on Legg Mason (LM). It is trading at only 11 times TTM EBITDA and about 1.4% of AUM.
Janus Capital (JNS) , though frequently rumored as a potential takeover, looks fairly full at 16.6 times TTM EBITDA and about 3.2% of AUM.
Another fairly cheap asset manager is Federated (FII), which despite its 5% move yesterday, is trading at 11.3 times EBITDA and 1.8% of AUM.
LM manages just under $1 trillion in assets, consisting of about 35% in equities, 49% in fixed income and the balance in money market (lower margin) assets. Federated, with about $240 million in assets, is much lighter in the higher fee equity proportion with only about 16% of AUM in equities and about 74% of assets in fixed income.
Disclaimer: I, my family, or clients have a current position in Legg Mason and Federated Investors.
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