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Franklin Resources, Inc. (BEN): Are Hedge Funds Right About This Stock?

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The third quarter was a rough one for most investors, as fears of an interest rate hike in the U.S, a weakening economy in China, and a stagnant Europe, weighed heavily on the minds of investors. Both the S&P 500 and Russell 2000 sank as a result, with the Russell 2000, which is composed of smaller companies, being hit especially hard. This was primarily due to hedge funds, which are big supporters of small-cap stocks, pulling some of their capital out of the volatile markets during this time. Let’s look at how this market volatility affected the sentiment of hedge funds towards Franklin Resources, Inc. (NYSE:BEN), and what that likely means for the prospects of the company and its stock.

Is Franklin Resources, Inc. (NYSE:BEN) a cheap stock to buy now? Investors who are in the know are buying. The number of long hedge fund bets improved by 2 in recent months. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as Baker Hughes Incorporated (NYSE:BHI), Hilton Worldwide Holdings Inc (NYSE:HLT), and Discover Financial Services (NYSE:DFS) to gather more data points.

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Today there are tons of tools investors have at their disposal to evaluate publicly traded companies. A pair of the best tools are hedge fund and insider trading signals. Our researchers have shown that, historically, those who follow the best picks of the top hedge fund managers can beat the market by a very impressive amount (see the details here).

Keeping this in mind, let’s take a glance at the recent action surrounding Franklin Resources, Inc. (NYSE:BEN).

How are hedge funds trading Franklin Resources, Inc. (NYSE:BEN)?

At Q3’s end, a total of 37 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 6% from one quarter earlier. With the smart money’s sentiment swirling, there exists a few notable hedge fund managers who were boosting their holdings meaningfully (or already accumulated large positions).

According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Jonathon Jacobson’s Highfields Capital Management has the number one position in Franklin Resources, Inc. (NYSE:BEN), worth close to $643.3 million, comprising 5.7% of its total 13F portfolio. The second largest stake is held by Pzena Investment Management, led by Richard S. Pzena, holding a $288 million position; the fund has 1.8% of its 13F portfolio invested in the stock. Other members of the smart money that are bullish include Mason Hawkins’ Southeastern Asset Management, David Harding’s Winton Capital Management and David Winters’ Wintergreen Advisers.

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