Is the Selling Over with Franklin Resources?

To be sure, Franklin's large international holdings does increase the firm's currency risk, but that's not enough to blot-out the positive story.

The First Call FY2010/FY2011 EPS estimates for BEN are $6.26 to $7.14. Each EPS estimate looks about 5% low, according to my analysis.

Technically, as noted, BEN over-corrected this spring, swooning below the $100 mark, to about $83, where the shares appear to have bottomed. The 2-month dip below the key, 50-day moving average is a concern, but the calculation here is that the shares will retake the $100 mark and trend back toward $120 in 2010.

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 $98-99, if it fails to clear $100.

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 50% of my BEN position before September 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.