Is Legg Mason, Inc. (LM) Finally Back From the Lost Decade?

Waddell & Reed Financial, Inc. (NYSE:WDR) reported assets that jumped to $104 billion at the end of Q1 from $96 billion in Q4 and $89 billion last year. Consequently, the company has seen a much better stock performance in the last year. Analysts expect earnings to grow 16.5% annually with 2014 earnings hitting $3.09. At $44, the stock trades around 14 times forward earnings or slightly below the expected growth rate.

Bottom line

Unfortunately, Legg Mason, Inc. (NYSE:LM) appears to be having difficulty in pulling assets back into equity mutual funds that once dominated the sector. In addition, the company is heavily weighted towards fixed income funds that could see outflows for years, placing the company in the unfortunate scenario of not growing assets to the extent of the sector. If the company could improve the asset flow scenario, especially into equity funds, the stock offers a better valuation over Eaton Vance Corp (NYSE:EV) and Waddell & Reed Financial, Inc. (NYSE:WDR).

Mark Holder and Stone Fox Capital Advisors, LLC have no positions in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned.

The article Is Legg Mason Finally Back From the Lost Decade? originally appeared on Fool.com.

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