About the only positive thing you can easily say about AllianceBernstein Holding LP (AB)
is that this limited partnership pays out a large portion of its
earnings as a distribution to unitholders - not that management has any
choice, given the rules that govern the taxation of limited
partnerships. To be sure, AllianceBernstein doesn't immediately leap out
as a great play on the investment management industry, given the
company's troubles growing assets under management and maintaining a
consistent payout.
Management does not seem to be kidding itself
about the need to change and improve performance. Better integration
between Alliance and Bernstein, as well as the addition of W.P. Stewart
gives hope for better results in equity investments, and a greater focus
on costs could lead to impressive earnings growth if better investment
results can draw in more AUM. With a fair value in the range of $22 to
$23, I don't think AB shares are all that cheap, but a 7% yield holds
some appeal.
As is the case with all limited partnerships, the
taxation of these investments is different than for normal equities and
not appropriate for all investors/accounts. Look into the tax
ramifications of owning units in a partnership like AB before investing.
Read the full article here:
AllianceBernstein Paying Investors To Wait For A Turnaround
No comments:
Post a Comment