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Franklin Resources Inks Deal to Acquire FinTech Startup
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Franklin Resources (BEN - Free Report) entered into an agreement with a San Francisco based, FinTech startup — Random Forest Capital, LLC. Though the financial terms of transaction were not disclosed, Franklin disclosed that the acquired firm’s employees would be joining Franklin Templeton Fixed Income Group investment’s team.
Founded in 2016, Random Forest Capital applies machine learning and statistical algorithms for analyzing gains in financial investments. Per the website, the company utilizes machine learning methods which apply successfully to real-life applications from medical diagnoses to sports analysis.
Moreover, it has a cloud infrastructure that enables the team to take a large amount of unstructured data for analyzing and finding investment opportunities.
This strategic move is likely to aid Franklin’s research abilities in fixed income areas. It is also in sync with the company’s aim to keep pace with technology which has become an important aspect in the investment management scenario.
Per Jenny Johnson, president and COO of Franklin Templeton Investments “We continue to make strategic investments and acquisitions in emerging investment-related technologies to augment and support Franklin Templeton’s global offerings.”
Further, Chris Molumphy, CIO of Franklin Templeton Fixed Income Group added that “The advanced pace of technological disruption is impacting the traditional investment landscape, providing new ways to identify and originate investment opportunities that generate value for investors. As a creative group of entrepreneurs, the Random Forest team brings an expanded tool set that enables us to further enhance our investment expertise and adapt to the ever-changing investment landscape.”
Prior to this, in January 2018, Franklin announced its acquisition of Edinburgh Partners Limited, an independent fund management company that invests globally with an emphasis on absolute returns over long-term. As of Dec 31, 2017, Edinburgh Partners had nearly $10 billion in global and emerging markets equities.
Franklin’s distribution platform will be further bolstered by the current deal. Moreover, these buyouts would greatly diversify product offerings. The company’s cost control measures continue to support bottom-line growth. However, declining investment management fees remains a concern for the company. Further, strict regulatory environment is a headwind.
Shares of Franklin have lost 10.5% over the past six months, compared with 8.1% industry’s rally.
Waddell & Reed Financial has witnessed 18.5% upward estimate revisions for the last 60 days. In a year’s time, the company’s share price has gained more than 7%. It sports a Zacks Rank of 1.
Legg Mason carries a Zacks Rank #2 (Buy). Its earnings estimates for 2018 have been revised 18.1% upward over the last 60 days. Also, its shares have gained 18.9% in the past year.
Virtus Investment Partners (VRTS - Free Report) carries a Zacks Rank of 2. The Zacks Consensus Estimate for the company has jumped 4.1% for the current year, in the last 60 days. Its share price has gained 20% in the past year.
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Image: Bigstock
Franklin Resources Inks Deal to Acquire FinTech Startup
Franklin Resources (BEN - Free Report) entered into an agreement with a San Francisco based, FinTech startup — Random Forest Capital, LLC. Though the financial terms of transaction were not disclosed, Franklin disclosed that the acquired firm’s employees would be joining Franklin Templeton Fixed Income Group investment’s team.
Founded in 2016, Random Forest Capital applies machine learning and statistical algorithms for analyzing gains in financial investments. Per the website, the company utilizes machine learning methods which apply successfully to real-life applications from medical diagnoses to sports analysis.
Moreover, it has a cloud infrastructure that enables the team to take a large amount of unstructured data for analyzing and finding investment opportunities.
This strategic move is likely to aid Franklin’s research abilities in fixed income areas. It is also in sync with the company’s aim to keep pace with technology which has become an important aspect in the investment management scenario.
Per Jenny Johnson, president and COO of Franklin Templeton Investments “We continue to make strategic investments and acquisitions in emerging investment-related technologies to augment and support Franklin Templeton’s global offerings.”
Further, Chris Molumphy, CIO of Franklin Templeton Fixed Income Group added that “The advanced pace of technological disruption is impacting the traditional investment landscape, providing new ways to identify and originate investment opportunities that generate value for investors. As a creative group of entrepreneurs, the Random Forest team brings an expanded tool set that enables us to further enhance our investment expertise and adapt to the ever-changing investment landscape.”
Prior to this, in January 2018, Franklin announced its acquisition of Edinburgh Partners Limited, an independent fund management company that invests globally with an emphasis on absolute returns over long-term. As of Dec 31, 2017, Edinburgh Partners had nearly $10 billion in global and emerging markets equities.
Franklin’s distribution platform will be further bolstered by the current deal. Moreover, these buyouts would greatly diversify product offerings. The company’s cost control measures continue to support bottom-line growth. However, declining investment management fees remains a concern for the company. Further, strict regulatory environment is a headwind.
Shares of Franklin have lost 10.5% over the past six months, compared with 8.1% industry’s rally.
The stock carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Stocks to Consider
Waddell & Reed Financial has witnessed 18.5% upward estimate revisions for the last 60 days. In a year’s time, the company’s share price has gained more than 7%. It sports a Zacks Rank of 1.
Legg Mason carries a Zacks Rank #2 (Buy). Its earnings estimates for 2018 have been revised 18.1% upward over the last 60 days. Also, its shares have gained 18.9% in the past year.
Virtus Investment Partners (VRTS - Free Report) carries a Zacks Rank of 2. The Zacks Consensus Estimate for the company has jumped 4.1% for the current year, in the last 60 days. Its share price has gained 20% in the past year.
Will You Make a Fortune on the Shift to Electric Cars?
Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge.
With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.
It's not the one you think.
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