Current season of publishing financial results is going quite well for my investments. Firstly Apple published results and they were very good. Then it was time for Franklin Resources and again I was positively surprised. What’s happened in case of BEN?

Main highlights from Q3 slides are presented below:


My brief comment – share price was so depressed as if investment performance should only deteriorate. In my opinion this must fluctuate and now it is time to outperform peers, so it is rather a positive outlook. Also look on Diluted earnings per share of 0.77$ (quarterly!). Well, valuation is not demanding, and this is why company is buying back shares. Can I find another such good opportunity to invest? Low valuation, piles of cash, improving momentum in financial results (still negative, but so much better). Also we can see that results were good due to cost management – it is a sign of high quality businesses. Remember also that it is $21B market cap, but almost $10B is pure cash… any special dividend is coming? I hope so.

The only problem are declining Assets under Management. Surely, the pace of decline is smaller, but still if we look on next quarter basis is relatively high.


On the other hand if we assume that company will generate EPS = 2.8 USD (maybe there is some upside) and we adjust market cap for cash ($9B) it gives us P/E cash adjusted 7.2 times. Very cheap.


Summing up, I am a happy owner of BEN shares and I see no reason to sell it.


Disclosure – long BEN