Legg Mason's (LM) AUM Climbs In April, Outflows Recorded

Baltimore-based Legg Mason Inc. (NYSE:LM) reported a rise in its assets under management (AUM) as of Apr 30, 2017, compared with the prior month. Preliminary month-end AUM came in at $731 billion, slightly up from Mar 2017.

April’s AUM displayed fixed income outflows of $1.0 billion, $0.6 billion equity outflows, alternative inflows of $0.1 billion and liquidity outflows of $0.2 billion. Moreover, negative foreign exchange impact was $0.1 billion.

Legg Mason’s equity AUM at the end of Apr 2017 increased slightly from the prior-month figure to $180.6 billion. Moreover, fixed income AUM inched up modestly from the previous month to $396.2 billion. Alternative assets increased slightly to $68.0 billion.

Rise in equity, fixed income and Alternative AUM resulted in long-term AUM of $644.8 billion. The figure marked slight increase from the prior month. However, liquid assets, which are convertible into cash, edged down modestly to $86.2 billion.

Competitive Landscape

Among other investment managers, Franklin Resources Inc. (NYSE:BEN) announced preliminary AUM by its subsidiaries of $741.0 billion for Apr 2017. Results displayed marginal rise from $740.0 billion as of Mar 31, 2017. However, the figure edged down around 1% from the prior-year quarter.

Invesco Ltd. (NYSE:IVZ) announced an increase in preliminary month-end AUM for Apr 2017. The company’s AUM came in at $841.4 billion, up marginally from $834.8 billion recorded in the prior month. The rise was supported by favorable market returns, foreign exchange, and inflows into PowerShares QQQs, partially offset by lower Money Market AUM and modest net long-term outflows. Further, FX increased April AUM by $3.2 billion.

Our Viewpoint

Though absence of consistent growth in equity markets remain headwinds, we believe that Legg Mason has the potential to outperform its peers over the long run, backed by its diversified product mix, positive foreign exchange fluctuations and leverage to the changing market demography.

Currently, Legg Mason carries a Zacks Rank #3 (Hold). The company’s stock gained 18.9% over the last six months, outperforming 7.6% growth recorded by the Zacks categorized Investment Management industry.

A better-ranked finance company is Lazard Ltd. (NYSE:LAZ) , carrying a Zacks Rank #2 (Buy). The company’s shares gained over 12% over the last six months. The Zacks Consensus Estimate for the stock climbed 4.4% to $3.35, over the last 30 days, for 2017.

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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