Board Member At Franklin Resources Buys $195K of Stock

A significant insider buy by Anthony Noto, Board Member at Franklin Resources BEN, was executed on February 7, and reported in the recent SEC filing.

What Happened: Noto demonstrated confidence in Franklin Resources by purchasing 7,323 shares, as reported in a Form 4 filing with the U.S. Securities and Exchange Commission on Wednesday. The total value of the transaction is $195,011.

The latest market snapshot at Thursday morning reveals Franklin Resources shares down by 0.0%, trading at $26.72.

Unveiling the Story Behind Franklin Resources

Franklin Resources provides investment services for individual and institutional investors. At the end of October 2023, Franklin had $1.335 trillion in managed assets, composed primarily of equity (31%), fixed-income (35%), multi-asset/balanced (11%) funds, alternatives (19%) and money market funds (4%). Distribution tends to be weighted equally between retail investors (50% of AUM) and institutional accounts (48%), with high-net-worth clients accounting for the remainder. Franklin is one of the more global of the U.S.-based asset managers we cover, with more than a third of its assets under management invested in global/international strategies and 29% of managed assets sourced from clients domiciled outside the United States.

Franklin Resources's Financial Performance

Revenue Growth: Over the 3 months period, Franklin Resources showcased positive performance, achieving a revenue growth rate of 1.22% as of 31 December, 2023. This reflects a substantial increase in the company's top-line earnings. In comparison to its industry peers, the company trails behind with a growth rate lower than the average among peers in the Financials sector.

Profitability Metrics:

• Gross Margin: With a high gross margin of 61.24%, the company demonstrates effective cost control and strong profitability relative to its peers.

• Earnings per Share (EPS): Franklin Resources's EPS reflects a decline, falling below the industry average with a current EPS of 0.5.

Debt Management: Franklin Resources's debt-to-equity ratio is below the industry average. With a ratio of 0.98, the company relies less on debt financing, maintaining a healthier balance between debt and equity, which can be viewed positively by investors.

Evaluating Valuation:

• Price to Earnings (P/E) Ratio: The Price to Earnings ratio of 14.06 is lower than the industry average, indicating potential undervaluation for the stock.

• Price to Sales (P/S) Ratio: The current P/S ratio of 1.66 is below industry norms, suggesting potential undervaluation and presenting an investment opportunity for those considering sales performance.

• EV/EBITDA Analysis (Enterprise Value to its Earnings Before Interest, Taxes, Depreciation & Amortization): With a lower-than-industry-average EV/EBITDA ratio of 10.56, Franklin Resources presents a potential value opportunity, as investors are paying less for each unit of EBITDA.

Market Capitalization Analysis: Falling below industry benchmarks, the company's market capitalization reflects a reduced size compared to peers. This positioning may be influenced by factors such as growth expectations or operational capacity.

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Illuminating the Importance of Insider Transactions

It's important to note that insider transactions alone should not dictate investment decisions, but they can provide valuable insights.

In the realm of legality, an "insider" is defined as any officer, director, or beneficial owner holding more than ten percent of a company's equity securities under Section 12 of the Securities Exchange Act of 1934. This includes executives in the c-suite and major hedge funds. These insiders are required to disclose their transactions through a Form 4 filing, to be submitted within two business days of the transaction.

Notably, when a company insider makes a new purchase, it is considered an indicator of their positive expectations for the stock.

Conversely, insider sells may not necessarily signal a bearish stance on the stock and can be motivated by various factors.

Transaction Codes Worth Your Attention

Delving into transactions, investors typically prioritize those unfolding in the open market, as precisely outlined in Table I of the Form 4 filing. A P in Box 3 indicates a purchase, while S signifies a sale. Transaction code C signals the conversion of an option, and transaction code A denotes a grant, award, or other acquisition of securities from the company.

Check Out The Full List Of Franklin Resources's Insider Trades.

This article was generated by Benzinga's automated content engine and reviewed by an editor.