Franklin Resources, Inc. (BEN): Is This Insider Trading a Scary Sign?

After opening Tuesday at around $30.8, Franklin Resources, Inc. (NYSE:BEN) stock surged to as high as $30.88. It then made a downturn, dipping as low as $30.3. Although the stock bounced a bit into the close, it finished the day at $30.56, down -0.38 points or -1.23 percent on the day. The final volume for the day was 2.847 million, which was less than its average volume. The firm is left with a market cap of $16.2 billion and now has 528.61 million shares outstanding. Franklin Resources, Inc. (BEN) stock has lost -2.15 percent of market value in 21 trading days.

BEN stock has a trailing 3-year beta of 1.47, offering the possibility of a higher rate of return, but also posing more risk. The portion of a company’s profit allocated to each outstanding share of common stock was $3.19 a share in the trailing twelve months. The stock’s value has fallen -23.36 percent year to date (YTD) against a decline of -25.72 percent in 12 month’s time. The company’s shares still trade -27.74 percent away from its 1-year high of $42.29 and 2.04 percent up from 52-week low of $29.95. The average consensus rating on the company is 3.4, on a scale where 5 equates to a unanimous sell rating. In short, the mean analyst recommendations are calling this stock a hold.

Franklin Resources, Inc. (BEN) will probably climb 4.97 percent over the next 12 months, according to price target estimates compiled by finviz. Meanwhile, they have set a $37-month high price target. This represents a whopping 21.07 percent increase from where shares are trading today. The 12-month median price target assigned by the analysts stands at $32.5, which represents a return potential of 6.35 percent when compared to the closing price of the stock of $30.56 on Tuesday, October 09. The lowest price target for the stock is $28 — slightly more than -8.38 percent from BEN’s current share price.

History has shown that shares in Franklin Resources, Inc. have gone down on 18 different earnings reaction days and are predicted to add 0.02 percent when the company reports upcoming earnings.

Let’s take a look at some insider activity at Franklin Resources, Inc. (NYSE:BEN) and see the pattern. The earliest insider trade took place on 09/21/2018. Plafker Jed A. parted with a total of 4.82 thousand shares of company at average share price of $32.85. The total for the sales was set at $158.34 thousand. After this transaction, the Senior Vice President account balance stood at 56.88 thousand shares. The stock lost -5.81 percent since that insider sale. On 09/04/2018, Tyle Craig Steven, EVP and General Counsel, sold 11.17 thousand shares at a price per share of $31.35. This removed 350.02 thousand shares from the insider’s fortune and the stock saw a -1.31 percent retreat in value since the news became public. This transaction left 118.83 thousand shares in the EVP and General Counsel account.

On 12/21/2017, Reg. S-K Executive Officer Plafker Jed A. performed a sale transaction worth $342.14 thousand. This sale at $43.92 each has eliminated 7.79 thousand shares from the insider’s portfolio position. Meanwhile, shares have recorded -29.55 percent decrease since the transaction was reported. The insider now is left with 66.14 thousand shares remaining in the account. Johnson Gregory E, who performs the Chairman and CEO job, sold 49.99 thousand shares for $2.18 million. The disposal occurred on 12/19/2017 was priced at $43.58 per share. The share price plunged -29 percent since the reporting date. Johnson Gregory E now left with a stake of 5.12 million BEN stock worth $156.33 million after the insider selling.

The stock is currently hovering around the first support level of $30.28. Below this, the next support is placed in the zone of $30. Till the time, the BEN stock trades above this level, bulls have nothing to fear. On momentum oscillators front, ‘RSI’ has touched 41.92 on daily chart, which may remain a cause for concern. If the price breaks below $30 level on closing basis, then we may see more profit booking and the stock may show further weakness. On the flipside, hitting the $30.86 mark may result into a pull-back move towards $31.16 level.

Shares of Franklin Resources, Inc. (BEN) are trading at a P/E ratio of 14.55 times earnings reported for the past 12 months. The industry BEN operates in has an average P/E of 104.25. Its P/E ratio went as low as 11.32X and as high as 14.87 over the 5-year span.Further, it is sporting a 2.52 on the Price-to-Sales ratio. Compare this with the industry average P/S of 7.66.