Convex Strategies • 14 Comments
Tue, Jul. 5, 4:17 PM
- Interest rates continue to plummet, with U.S. government yields on the long end hitting new all-time lows. At least they remain positive (for now). Yields on French government paper are now negative all the way out to nine years, and Swiss 50-year bonds now sport yields below zero.
- Some hawkish words today from San Francisco Fed President Williams weren't enough to lift the share prices of yield-starved financials (XLF -1.5%).
- The SPDR KBW Bank ETF (KBE -3%), the SPDR KBW Regional Bank ETF (KRE -3%)
- Citigroup (C -3.3%), Morgan Stanley (MS -3.5%), Regions Financial (RF -3.9%), Fifth Third (FITB -4.2%), Capital One (COF -3.3%), Legg Mason (LM -3.3%), E*Trade (ETFC -3.2%), Schwab (SCHW -3%), MetLife (MET -4.2%), Prudential (PRU -3.2%), Lincoln (LNC -4.5%)
Fri, Apr. 29, 10:45 AM
- FQ4 adjusted loss of $16.7M or $0.15 per share vs. income of $158.5M and $1.45 in FQ3 and income of $117.9M and $1.03 a year ago. Operating revenues of $619.5M fell 6% Q/Q and 12% Y/Y.
- Operating expenses of $585.6M fell 35% Q/Q, but gained 11% excluding non-cash charges included in FQ3's results. Expenses up 2% Y/Y.
- Full-fiscal year adjusted EPS of $3.36 compares to $3.26 the prior fiscal year.
- Quarterly dividend is hiked by 10% to $0.22 per share.
- AUM of $669.6B down from $671.5B a quarter earlier and $702.7B a year ago. Long-term FQ4 outflows of $13.2B, liquidity outflows of $3.3B, offset by $9.7B in positive market performance and $4.7B in positive forex.
- 72% of U.S. fund assets are beating the Lipper category average on a 5-year basis. That falls to 61% on 3-year basis, and 48% on 1-year.
- Previously: Legg Mason beats by $0.04, misses on revenue (April 29)
- LM -4.5%
Wed, Mar. 16, 9:21 AM
- After adjusting the current $32 stock price for $9 per share in present value benefits from a tax shield, the shares are trading at just 8x 2017 EPS - that's 35% below that of peers at 12x-13x, says Credit Suisse's Craig Siegenthaler, upgrading Legg Mason (NYSE:LM) to Outperform from Neutral. He lifts the price target to $49 from $39.
- Shares are up 1.9% premarket to $32.64.
Fri, Mar. 11, 10:51 AM
- Citi's William Katz already had a Sell rating on the asset manager, but today puts Waddell & Reed (NYSE:WDR) on the U.S. Focus Sell List and cuts the price target to $17 from $18 (vs. current $25.23). Of note, says Katz:
- Relative fund performance analysis points to further deep attrition ahead
- Downbeat Feb. flow update reinforces outsized share loss theory
- Expectations of negative EPS revisions
- Outsized regulatory reform risk once DOL fiduciary rules get released
- Shares trade at inline valuation with peers despite fundamental issues
- Katz suggests instead moving money into Legg Mason (NYSE:LM) thanks to its superior strategic positioning, better flow outlook, more effective use of capital, and more attractive valuation.
- WDR is nevertheless higher by 2.9% today. LM is up 5.2%
Nov. 2, 2015, 3:14 PM
- Leading the way higher for the roughed-up sector are alternative players like Och-Ziff Capital (OZM +10.1%) and KKR (KKR +9.3%). There's also Blackstone (BX +4.3%), Fortress (FIG +3.2%), Oaktree (OAK +4.2%), and Carlyle Group (CG +7.4%).
- Traditional names like Manning and Napier (MN +11.7%), Affiliated (AMG +2.6%), Waddell & Reed (WDR +2.7%), Virtus Investment (VRTS +3.7%), and Legg Mason (LM +2.3%).
- Many of these names have reported Q3 already, and the results have mostly disappointed. On tap for tomorrow is Och-Ziff.
Oct. 22, 2015, 10:18 AM
- Perhaps the bad news is priced in as sluggish earnings from Franklin Resources (up 4.6%), Janus Capital (JNS +4.3%), and T. Rowe Price (TROW +4.8%) are bought.
- BlackRock (BLK +2.5%), Legg Mason (LM +3.7%), Calamos (CLMS +2.8%), Invesco (IVZ +3.7%), Affiliated Managers (AMG +3.2%), Federated Investors (FII +2.2%), Waddell & Reed (WDR +2.3%), Artisan Partners (APAM +2.9%), Eaton Vance (EV +3.3%). The biggest mover of all today is ETF provider WisdomTree (WETF +7.8%).
- Previously: So bad it's good - Franklin Resources jumps after lame results (Oct. 22)
- Previously: AUM and earnings down at T. Rowe Price (Oct. 22)
- Previously: Assets and earnings slip at Janus (Oct. 22)
Aug. 13, 2015, 10:07 AM
Jan. 13, 2015, 9:37 AM
Dec. 10, 2014, 11:23 AM
- Total end-of-November AUM of $707.4B vs. $719.5B in October, up from $679.5B at the start of the year.
- Equity AUM of $201.1B vs. $206.7B in October.
- Fixed income AUM of $367B vs. $368.5B in October and $360.4B in September (Bill Gross exited Pimco at the end of September).
- LM -1.9%
Dec. 4, 2014, 10:19 AM
- In private-equity, Blackstone (BX +1.4%) and KKR & Co. (KKR +0.9%) post gains after being initiated with Overweight ratings, while Carlyle Group (CG -1%) and Oaktree Capital (OAK -0.5%) are started at Equal Weight.
- Moving onto traditional asset managers, Invesco (IVZ -0.5%) is rated Overweight, while T. Rowe Price (TROW -0.3%), Legg Mason (LM -1.5%), Franklin Resources (BEN -0.9%), and BlackRock (BLK -0.2%) are all started at Equal Weight.
Jun. 4, 2014, 7:19 AM
- Legg Mason Investment Counsel & Trust (LM) provides customized investment advisory and trust services to individuals and institutions, and has more than $9B in AUM. It will be integrated into Stifel's (SF) Global Wealth Management segment.
- Terms of the deal weren't announced and it's expected to close this fall.
- Legg Mason chief Joseph Sullivan: "This transaction continues to evolve our investment affiliate lineup toward fewer and larger firms that can be better leveraged through our global distribution platform."
- LM +7% premarket
Jan. 31, 2014, 12:35 PM
- Reiterating their Underperform rating on Legg Mason (LM -2%), analysts David Chiaverini and Richard Fellinger, give the company kudos for improved long-term inflows, but reminds they were still flat on the quarter, negative on the year, and weaker than industry peers.
- "Legg Mason is not as well positioned as peers to capture flows in an equity rotation scenario or rising interest rate environment," they write.
- "While management remains focused on addressing its products gaps, including the recent hire of Thomas Hoops as head of business development, we believe it will take time before products can be developed/acquired that will meaningfully add to the flow picture.'
- Earlier earnings coverage
Jun. 12, 2013, 9:43 AM
Mar. 5, 2013, 12:00 PM
Feb. 1, 2013, 7:38 AM
More on Legg Mason (LM) FQ3 earnings: AUM of $648.9B up 3% Y/Y. Client outflows of $7.5B during FQ3 offset by $5.7B in market performance. Adjusted operating margin of 19.8% vs. 21.2% in FQ2. Interim CEO: "We are disappointed with our results this quarter." The CEO search continues. Traders see something they like, shares +4.9% premarket. (PR)| Feb. 1, 2013, 7:38 AM
Jan. 10, 2013, 12:40 PM
Legg Mason (LM +5.7%) pops on a report it's been approached by some senior managers and P-E firms about a buyout. The board turned away the feelers at least until the company has a new CEO, according to sources. Privatizing the company is easier said then done thanks to the high level of firm debt compared to industry peers.| Jan. 10, 2013, 12:40 PM