Legg Mason, Inc. (LM)

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.

Economies of scale will kick in and valuations will rise.

They own too much common/preferred Freddie/Fannie. This dictates that they must underperform their peers if not the entire S&P. Unless one believes in miracles this portion of their portfolios is toast. I mean, I am an optimist but also a realist. Dump it before the world finds out the extent of their toxic exposure, please!

Asset management is a scale business and Legg Mason is one of the biggest. However, the company is trading well below industry peers such as TROW and BEN. The market is partly discounting the stock because LM has more fixed income assets compared to peers but shares are too cheap.
Any short-term performance issues seem well priced into the stock already. This company generates a ton of cash, with very little capital requirements which means shareholders will be richly rewarded over time.

They paid all their smart people to much money and went on to their own investment group. If you know the name of it you too can ride along.

Cheap and just starting to get its business together.

hammered. will do really well.

Way oversold. Money coming back in to the US funds. LM will definitely benefit. Will go back up to 110.

I'm calling the bottom and doubling down.

Undervalued compared to peers.

Interested because it dropped

Betting that the financial sector is close to the bottom, and if it isn't the dividend keeps the Roth happy anyway.

Rebound ahead.

Excellent asset manager going thru short term transition while integrating Citi's business segment acquired thru swap. No worries over the longer term.

Asset management should be mandatory for financial services.

undervalued, integration problems moving along, potential for margin expansion after equity/income percentages rationalize

Good value.

Book value of .35. Rough Economic times, but the company usually makes pretty good money. Event the current cash flow statement does really warrant a .35 book value. Company pays a dividend which I like. This is very much a value pick.

Way undervalued right now. Bound to bounce.