Insider Confidence On Display: JENNIFER JOHNSON Acquires $396K In Franklin Resources Stock

A notable insider purchase on August 26, was reported by JENNIFER JOHNSON, President and CEO at Franklin Resources BEN, based on the most recent SEC filing.

What Happened: JOHNSON made a significant move by purchasing 18,900 shares of Franklin Resources as reported in a Form 4 filing with the U.S. Securities and Exchange Commission. The transaction's total worth stands at $396,021.

At Tuesday morning, Franklin Resources shares are down by 0.87%, trading at $20.56.

All You Need to Know About Franklin Resources

Franklin Resources provides investment services for individual and institutional investors. At the end of July 2024, Franklin had $1.663 trillion in managed assets, composed primarily of equity (36%), fixed-income (34%), multi-asset/balanced (10%) funds, alternatives (16%) and money market funds (4%). Distribution tends to be weighted equally between retail investors (52% of AUM) and institutional accounts (46%), with high-net-worth clients accounting for the remainder. Franklin is one of the more global of the US-based asset managers we cover, with 30% of its assets under management invested in global/international strategies and just as much sourced from clients domiciled outside the United States.

Franklin Resources's Economic Impact: An Analysis

Positive Revenue Trend: Examining Franklin Resources's financials over 3 months reveals a positive narrative. The company achieved a noteworthy revenue growth rate of 7.82% as of 30 June, 2024, showcasing a substantial increase in top-line earnings. As compared to its peers, the revenue growth lags behind its industry peers. The company achieved a growth rate lower than the average among peers in Financials sector.

Evaluating Earnings Performance:

• Gross Margin: The company maintains a high gross margin of 79.98%, indicating strong cost management and profitability compared to its peers.

• Earnings per Share (EPS): Franklin Resources's EPS lags behind the industry average, indicating concerns and potential challenges with a current EPS of 0.32.

Debt Management: Franklin Resources's debt-to-equity ratio is below the industry average at 1.06, reflecting a lower dependency on debt financing and a more conservative financial approach.

Assessing Valuation Metrics:

• Price to Earnings (P/E) Ratio: The current P/E ratio of 12.88 is below industry norms, indicating potential undervaluation and presenting an investment opportunity.

• Price to Sales (P/S) Ratio: With a lower-than-average P/S ratio of 1.27, the stock presents an attractive valuation, potentially signaling a buying opportunity for investors interested in sales performance.

• EV/EBITDA Analysis (Enterprise Value to its Earnings Before Interest, Taxes, Depreciation & Amortization): With an EV/EBITDA ratio lower than industry averages at 10.67, Franklin Resources could be considered undervalued.

Market Capitalization Analysis: The company's market capitalization is below the industry average, suggesting that it is relatively smaller compared to peers. This could be due to various factors, including perceived growth potential or operational scale.

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Uncovering the Importance of Insider Activity

Insightful as they may be, insider transactions should be considered alongside a thorough examination of other investment criteria.

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

Pointing towards optimism, a company insider's new purchase signals their positive anticipation for the stock to rise.

Nevertheless, insider sells may not necessarily indicate a bearish view and can be influenced by various factors.

Transaction Codes To Focus On

When it comes to transactions, investors tend to focus on those in the open market, detailed in Table I of the Form 4 filing. A P in Box 3 denotes a purchase, while S indicates 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.