Important Updates for Investors
Carla Pasternak's Premiere Issue of High-Yield International Just
Released
Income expert Carla Pasternak's debut issue of High-Yield
International covers a Taiwanese manufacturer yielding 9.5%... a
rare Mexican monopoly yielding 13.4%... and other top-performing
investments yielding up to 19.0%.
Government's Biofuel Timetable Could Spell +15,900% Growth
+15,900% growth might seem far-fetched... but it's not. In fact, it
is mandated by law. And I've identified the ONLY stock positioned to
capture this growth.
The
Silver Lining to a Falling Dollar
Despite the U.S. national debt, there is a silver lining for income
investors. This massive spending, combined with movement out of U.S.
Treasuries, is going to take its toll on the dollar, and
international income investors could reap the rewards in the form of
higher dividends. |
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| Legg
Mason (LM) Looks Poised to Rebound |
Published: September 18, 2006
In a recent issue of our premium
value-oriented newsletter -- Half-Priced
Stocks -- we profiled Bill Miller and the Legg Mason Value Trust
(LMVTX). This mutual fund has been hugely successful, outpacing the S&P
500 for 15 straight years and delivering annualized gains of nearly +16%
since inception.
Naturally, that top-notch performance has attracted quite a bit of attention
and money. As of last quarter, the fund had an asset base of more than $18
billion, with each of those dollars generating management fees for Legg
Mason.
Some might find it surprising to know that while LMVTX has rewarded
shareholders handsomely over the past decade, the fund's total returns have
been shattered by those of its parent company. In fact, Legg Mason (NYSE:
LM) has been one of the market's top-performing stocks, returning an
astounding +29% annually over the last ten years. A $10,000 investment made
on August 31, 1996 would be worth $180,662 today -- a cumulative gain of
+1,706%.
Despite the surge in the stock, Legg Mason is still trading at a price/book
ratio of 2.2 -- well below the industry average of 3.5. The shares are also
changing hands at steep discount to our fair value estimate of $120.
Following its historic deal with Citigroup (C) last summer, Legg Mason has
shed its retail brokerage operations and vaulted straight to the major
leagues of money management. Essentially, the agreement handed Legg Mason
control of Citigroup's asset management business -- and $437 billion in
assets under management (AUM) -- in exchange for its brokerage unit.
The asset swap not only transformed Legg Mason into a top-five money
manager, but it also removed potential conflicts of interest that have
tainted other financial services companies. As of now, the company is
entirely focused on the money management side of the business -- selling the
funds is someone else's responsibility. The deal also came with an added
perk: a three-year distribution agreement that will see Legg Mason Funds
marketed in Citigroup's vast retail distribution channel of brokerages and
bank branches.
Legg Mason has also picked up Permal Group, a well-known hedge fund with
more than $20 billion in managed assets. Those acquisitions have pushed the
firm's total AUM above the $850 billion mark. Last quarter, those
assets helped the firm generate more than $1 billion in investment advisory
and distribution fees -- more than double its pre-acquisition levels.
By staying clean during the market-timing scandals that rocked the fund
industry and crippled the credibility of other companies, Legg Mason has
built on its already strong reputation. Having the esteemed Bill Miller
among a lineup of top-tier managers hasn't hurt either. Over the next few
years, Legg Mason should continue to see healthy asset inflows, boosting its
stream of recurring, high-margin management fees. And after watching the
stock pull back sharply from its 52-week high of $140 per share, we believe
the time is right for value investors to take a closer look at Legg Mason.
Note:
The above article was merely a small excerpt from
a recent issue of our premium value investing newsletter -- Half-Priced
Stocks. The mission of Half-Priced Stocks is to
help our readers identify securities that are trading at a steep
discount to their intrinsic net worth. In some cases this
discount can reach up to 50% or more, giving savvy value
investors the chance to purchase quality stocks for just pennies
on the dollar. To learn more about our Half-Priced Stocks
service, please visit the following link:
https://www.StreetAuthority.com/subscribe-hps.asp |
Thanks for reading!
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Nathan Slaughter
Editor
Half-Priced Stocks, The ETF Authority
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| To receive
in-depth guidance on today's leading value opportunities, plus educational guidance, please subscribe to
Nathan Slaughter's premium value investing newsletter --
Half-Priced
Stocks |
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