Sunday, March 13, 2016

Seeking Alpha: Market Headwinds Slow The Progress At AllianceBernstein

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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