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4 pts

Opinion on  Legg Mason Inc (LM)     Sector: Financial  >  Industry: Investment Services
Nuveen Takeover-Think aBout Legg and Federated

Jun 21, 2007 06:12 AM GMT
Return Risk
-26.86% HIGH
Tracked Blogger

Fundamental Analysis  
Via www.valuediscipline.blogspot.com:  

Nuveen Investments ( JNC ) announced this morning that it was being taken over by Madison Dearborn for $65 per share. JNC has assets under management (AUM) of about $165 billion roughly half of which is equities. The takeout valuation is 16 times trailing EBITDA and about 3.4% of AUM.

I think other asset management companies look starkly cheap in the light of this transaction.

Readers are aware of our positive views on Legg Mason ( LM ) It is trading at only 11 times TTM EBITDA and about 1.4% of AUM.

Janus Capital ( JNS ) though frequently rumored as a potential takeover looks fairly full at 16.6 times TTM EBITDA and about 3.2% of AUM.

Another fairly cheap asset manager is Federated ( FII ) which despite its 5% move this morning is trading at 11.3 times EBITDA and 1.8% of AUM.

Some previous posts on Legg Mason:
Falling Out the First Storey Window

Legg Mason-Is It Time to Start Looking?

LM manages just under $one trillion in assets consisting of about 35% in equities, 49% in fixed income and the balance in money market (lower margin) assets. Federated, with about $240 million in assets is much lighter in the higher fee equity proportion with only about 16% of AUM in equities and about 74% of assets in fixed income.

Disclaimer: I, my family, or clients have a current position in Legg Mason and Federated Investors.





This is a tracking account  [?]   SocialPicks is not affiliated with Value Discipline. The POS/NEG sentiment is automatically determined by SocialPicks from this blog post and should not be recognized as a position recommendation by Value Discipline

LM:  This call was made on 06/21/07 @ $99.5
Rating:   Positive   $99.5 (06/21/07)
Gain/Loss:   -68.27% in 873 days


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Who voted on this idea?
Bill Earner 26% 06/21/2007


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