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Money management firm Franklin Resources (BEN), which I first wrote about on July 20, 2009 at a price of $73.88, has survived the financial crisis and recession in good shape.One of the best-run asset managers, Franklin's double-digit asset growth should continue in FY2010, aided by an improved asset mix, better fund performance across asset classes, and increased flows from money market funds. BEN's relatively strong balance sheet, declining debt liabilities, and prudent cost cuts rounds out the positive story.
The First Call FY2010/FY2011 EPS estimates for BEN are $6.31 to $7.26. Each EPS estimate appears to be about 10% low, according to my analysis.
Technically, as expected, Franklin's stock popped back above the key, 50-day moving average in early 2010 after a correction to about $96 -- a sign that institutional investors took advantage of the dip to add to/establish a position in Franklin's shares.
2010 Outlook: I view Franklin as a long-term play, but if investors are looking to sell BEN within the year, it's probably best to take your profits after it rises to $135-139, if it fails to rise above $140.
Stock Analysis: I consider Franklin Resources to be a moderate-risk stock. If an investor has already purchased the company's shares, I'd hold them. If not, I'd consider buying a 25% position in BEN now; then buy another 25% in one month, if U.S. and global economic conditions don't worsen substantially. Under any circumstance, I wouldn't buy more than 75% of my BEN position before June 2010 and I'd put a sell/stop loss at: $72.
Disclosure: Lazzaro has no positions in stocks, but does own shares in two Pimco Bond Funds: PHDAX and PYMAX.
Technically, as expected, Franklin's stock popped back above the key, 50-day moving average in early 2010 after a correction to about $96 -- a sign that institutional investors took advantage of the dip to add to/establish a position in Franklin's shares.
2010 Outlook: I view Franklin as a long-term play, but if investors are looking to sell BEN within the year, it's probably best to take your profits after it rises to $135-139, if it fails to rise above $140.
Stock Analysis: I consider Franklin Resources to be a moderate-risk stock. If an investor has already purchased the company's shares, I'd hold them. If not, I'd consider buying a 25% position in BEN now; then buy another 25% in one month, if U.S. and global economic conditions don't worsen substantially. Under any circumstance, I wouldn't buy more than 75% of my BEN position before June 2010 and I'd put a sell/stop loss at: $72.
Disclosure: Lazzaro has no positions in stocks, but does own shares in two Pimco Bond Funds: PHDAX and PYMAX.
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