On Wednesday, Baltimore-based
Legg Mason Inc.
) reported a rise in its assets under management (AUM) as of
September 2012, compared with the prior quarter, following
resurgence from the last three months.
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Preliminary quarter-end AUM came in at $650.7 billion, up 1.8%
compared with the June quarter. Equity AUM, Fixed income AUM and
liquidity AUM recorded augmentations in the quarter under review.
Legg Mason's equity AUM as of September 2012 inched up 1.5% from
the June quarter to $153.4 billion while fixed income AUM climbed
2.4% sequentially to $369.4 billion.
The upside in equity AUM and fixed income AUM resulted in long-term
AUM of $522.8 billion, reflecting a 2.2% rise against the prior
quarter. Moreover, liquid assets, which are convertible into cash,
ascended 6.5% to $127.9 billion from $120.1 billion as of June
One of Legg Mason's peers,
) announced a 2.0% rise in its preliminary month-end AUM for
September 2012. The company's AUM for the reported month was $683.0
billion compared with $669.7 billion at the end of August.
Another peer -
Franklin Resources Inc.
) - declared preliminary AUM of $749.9 billion by its subsidiaries
for the month of September 2012. The company's results witnessed a
rise of 2.6% from $731.0 billion as of August 31, 2012. Moreover,
it increased 13.6% from $659.9 billion as of September 30, 2011.
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, assets
outflows will remain a significant headwind. Yet, owing to the
restructuring initiatives and the cost-cutting measures, we expect
operating efficiencies to improve and dividend payments to continue
to inspire investors' confidence in the stock.
Legg Mason currently retains a Zacks #3 Rank, which translates into
a short-term Hold rating.