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AllianceBernstein Holding L.P. Message Board

  • speakthetruthasyouseeit speakthetruthasyouseeit Feb 10, 2012 10:05 AM Flag

    Q4 numbers: continued redemptions, not sure how this stock is above $10

    Here are my basic notes:

    1) The Equities biz which is $129B in assets and roughly half of revenues has seen redemptions of $70B/yr for each of the last 3 years. At that pace, there won't be a business left there in 2 years!

    Huge underfperformance in 2011 continued so now most of the 1,3,5, and 10 yr relative performance numbers for all of their main equity products are in negative territory. Its hard to imagine continued outflows here not being a foregone conclusion.

    See the page 21 of their Q4 slideshow presentation:

    2) Of course, this business has a lot of operating leverage (its hard to be anything but a back stock when you have outflows). So declines in revenues lead to bigger declines in operating income, earnings, and distributions. The latest quarterly distribution was $0.12. It will tick up some as they cut some costs, but I highly doubt it will reach $1.00 a year (let alone $0.75 a year) again.

    See the distributions chart on the lower left of:

    3) The fixed income biz is doing well and giving the firm some stability.

    The market rally has provided a wonderful exit price for AB here. My guess is that a raft of downgrades will soon follow this earnings call.

21.84-0.17(-0.77%)Aug 24 4:02 PMEDT