BEN - Victory Capital Is Starting To Look Like A Value Trap
- There's ongoing consolidation in the asset management space and Victory looks like an excellent takeover target with a forward P/E of less than 6x.
- However, the company is bleeding AUM and booked net outflows of $17.8 billion in the first three quarters of 2020.
- The main reason for this is Schwab’s purchase of USAA’s brokerage business and I think Victory made a strategic mistake by not buying it itself back in 2019.
- With Victory’s rights to use the USAA brand expiring in around 18 months, the AUM issues are likely to become more serious in the future.
- I think Victory is in serious trouble and its problems are likely to scare off any potential buyers besides Schwab.
For further details see:
Victory Capital Is Starting To Look Like A Value Trap