Legg Mason Inc.
) reported a rise in its assets under management (AUM) as of Feb
28, 2014, as compared with the prior month. Preliminary month-end
AUM came in at $694.8 billion, up 2.2% from the prior month.
The surge over the prior month mainly resulted from market
appreciation and $1.5 billion of positive foreign exchange.
Further, long term inflows were driven by equity inflows, partly
offset by marginal fixed income outflows.
Legg Mason's equity AUM as of February-end jumped 4.6% over the
prior month to $185.9 billion. Moreover, fixed income AUM
increased 1.6% from the prior month to $364.0 billion.
The rise in fixed income as well as equity AUM resulted in
long-term AUM of $549.9 billion. The figure marked a 2.6%
increase from the prior month. Liquid assets, which are
convertible into cash, rose around 1.0% to $144.9 billion.
Among other investment managers,
) announced a 3.4% rise over the prior month in its preliminary
month-end AUM for Feb 2014, which came in at $791.2 billion.
Franklin Resources Inc.
) declared preliminary AUM of $882.2 billion by its subsidiaries
for Feb 2014, which exhibited a 2.9% rise from $857.2 billion as
of Jan 31, 2014.
We believe that 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. Moreover, a
significant rebound in equity markets in the coming quarters
would be a catalyst.
However, in the near term, asset outflows might remain a
significant headwind. Nevertheless, owing to the company's
restructuring initiatives and aggressive cost cuts, we expect
operating efficiencies to improve and dividend payments to keep
up investors' confidence in the stock.
Currently, Legg Mason carries a Zacks Rank #3 (Hold). A
better-ranked asset manager worth consideration is
) with a Zacks Rank #1 (Strong Buy).
FRANKLIN RESOUR (BEN): Free Stock Analysis
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LEGG MASON INC (LM): Free Stock Analysis
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