There's a good potential turnaround story at AllianceBernstein L.P. (NYSE:AB),
but it is going to take a cooperative market environment and that
hasn't been the case lately. The shares have taken a dive since my last update, along with peers like Franklin Resources (NYSE:BEN), Invesco (NYSE:IVZ), Legg Mason (NYSE:LM), and Janus (NYSE:JNS),
as market conditions have made it noticeably harder to gather and
retain the assets under management (AUM) that fuels the fee-generating
model.
AllianceBernstein hasn't made the progress with AUM
accumulation or margins that I had hoped for a year ago, but there's
still upside here. If management can leverage relatively good
actively-managed fund performance into improved AUM, margin leverage
could be significant. That said, investors can't afford not to consider
the risks that the margin leverage fails to materialize and the company
never truly manages to harmonize the Alliance and Bernstein businesses. I
still believe that a fair value in the mid-to-high $20s is in play,
along with a rich tax-advantaged distribution, but asset managers need
relatively healthy markets to make headway.
Read more here:
Market Headwinds Slow The Progress At AllianceBernstein
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