Dan Farb's Presentation at Capitalize For Kids Conference 2016
• LONG Franklin Resources (BEN). Has 2x the exposure to commodities and emerging markets relative to other asset managers.
• An asset manager with $700 billion in assets.
• Recently, stock and earnings have declined due to this exposure and currently trades at a discount.
• Since 1987, has compounded capital over 16% per year (vs. 10% in S&P). Made two strong acquisitions, Templeton in early 90s and Mutual Shares in the mid-90s
• Average U.S asset manager currently trades at 14x earnings, BEN trades at 12.7x earnings.
• Expects AUM and fund performance to stabilize which should help grow earnings and potentially multiple expands.
• Currently trades at $34/share but has $18/share in net cash and real estate (90% of cash is held offshore).
• Johnson family owns 37% of the shares, aligning well with shareholders’ interests.
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