LM - Franklin Resources: Time To Escape The Value Trap

• Franklin Resources is attractively priced and has a healthy dividend yield.
• Continuation of poor net flow trends is a risk, but captured in the share price.
• I use a simple scenario analysis framework to highlight the valuation appeal.
• Balance sheet capacity for further acquisitions is limited, so management has little choice but to focus on better execution.
• Leveraged to benefit from a sustained “value rally.”.

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