Legg Mason, Inc. (LM)

062762 (< 20) Submitted: 4/24/08 1:16 AM : Start Price: $58.98 LM Score: -25.57

I can't believe I took my eyes off this company for a week and it registers a 10% move!


Bill Miller said today that he feels the worst is over and that LM is well positioned for the road ahead - can you say "It's Miller TIme!"?


Even if the rest of this year is the equivalent of Mr. Toad's Wild Ride, it won't compare to the Mission to Mars we'll be taking in the next 1-2 years.


With a PE of 11.85, PEG around .60, about $1 trillion under roof to which management fees bring in around $20mil, this stock should be worth $85-90 at the least.


Even Fool Inside Value capitan Philip Durell has an intrinsic value of $116, which is a 100% gain over the current price, and may just be fairly valued in the mid-range between my $85 low and a possible high of $140. Of course, when the market shifts, and it will eventually shift, all bets of highs are off as money starts flooding back in from those that have been hand-sitting while Mr. Market finished with its tantrum.


The stock hit its 52 wk high of around $105 nearly a year ago, but has steadily declined since. The negative turnaround was the result of millions being pulled from funds/equities because of declining performance in its stellar funds. The only thing holding it up was increases in bond and money market deposits.


But, stellar funds are run by stellar fund managers, and these tigers rarely, if ever, change their stripes. I expect that after Bill Miller took his Value Trust fund a bit more into growth territory than expected, that all the new-found beaten up and down stocks must have his value blood frothing for great deals.


I choose to benefit from such frothiness.

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