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FBR Capital Gets Bearish on Fixed Income, Downgrades Franklin Resources and Legg Mason (BEN, LM)
1/5/2011 8:57:00 AM
Fixed-income concentrated asset managers Franklin Resources, Inc. ( BEN ) and Legg Mason, Inc. ( LM ) both caught downgrades from analysts at FBR Capital Markets on Wednesday.
The firm downgraded BEN from "Outperform" to "Market Perform" while cutting its rating on LM from "Market Perform" to "Underperform," citing a trend of investors straying from fixed-income funds.
An FBR analyst commented, "Consistent with our expectation of an investor rotation out of fixed-income mutual funds, we are lowering our ratings on the more fixed-income-concentrated managers under coverage, Legg Mason ( LM ) and BEN. Note, fixed-income products comprise 55% and 39% of LM and BEN assets under management (AUM), respectively, versus the peer group average of 28%."
Franklin Resources shares fell 75 cents, or -0.7%, in premarket trading Wednesday, while Legg Mason shares were off 46 cents, or -1.3%.
The Bottom Line
Franklin Resources, Inc. ( BEN ) and Legg Mason, Inc. ( LM ) are both rated "Neutral," holding Dividend.com DARS™ Ratings of 3.4 and 3.2 out of 5 stars, respectively.