On May 26, 2023, the financial community was abuzz with news of Franklin Resources Inc.’s (NYSE: BEN) recent filing with the Securities and Exchange Commission (SEC),which reported a significant reduction in its share position in Bread Financial Holdings, Inc. (NYSE: BFH).
According to the filing, Franklin Resources owned 2,871,884 shares of Bread Financial leading up to its fourth-quarter decision. After selling an astonishing 1,938,731 shares during that quarter alone-amounting to a decrease of 40.3%-Franklin Resources now owns only 5.76% of Bread Financial Holding’s total outstanding shares. The statement also revealed that this new reduced stake is valued at $108,155,000.
Interestingly enough, while investor interest in Bread Financial may be waning due to Franklin Resource’s recent actions,Turtle Creek Asset Management-a major shareholder of the company-has taken aggressive and carefully considered measures to increase its own equity holdings.
On May 8th, Turtle Creek Asset Management purchased 150,000 shares at an average price point of $25.17 per share for a total value of $3,775,500.00 bringing their overall ownership percentage higher within the firm.
As these impressive transactions are felt across the industry,the impact on BFH’s stock price is yet to be determined.However,it should be noted that other market forces will come into consideration too- most notably Bread Financial’s recent dividend payment announcement which will occur June 16th.Prospective investors eyeing or making moves towards this company should exercise caution and diligently consider all information at hand before initiating any trades especially with insiders involvement and stock movements being very active as recently experienced for this company and finalize your investment decisions in correspondence with your financial advisor after carefully reviewing these ongoing developments.
Bread Financial Attracts Large Investors Amid Industry Changes
Bread Financial experiences changes in investors’ positions as several large investors acquire stakes in the company. Institutional investors and hedge funds have been the major shareholders, owning 96.62% of Bread Financial’s stock. Recently, Vanguard Group Inc., BlackRock Inc., Turtle Creek Asset Management Inc., State Street Corp, and Dimensional Fund Advisors LP have all acquired new positions in Bread Financial during different quarters over the past year.
The diversity of large investors acquiring stakes shows sentiment concerning the financial services industry and its future outlook. Morgan Stanley dropped their price objective on shares of Bread Financial from $39 to $32 with an equal weight rating, while Keefe, Bruyette & Woods downgraded shares of Bread Financial from outperform to market perform with a target price decrease from $35 to $30. Stephens however remained bullish issuing an overweight rating with a target price of $64 per share.
The current dividend payout ratio is at 8.99% representing an annualized dividend yield of 2.88%. As for the previous quarterly earnings data on Thursday, April 27th, Bread Financial’s revenue was above analyst estimates at $1.29 billion netting $9.08 earnings per share (EPS). The company surpassed consensus estimations by having a P/E ratio of 3.12 with a P/E/G ratio standing at 0.08 and has a beta of 1.92 indicating higher volatility than what’s expected from the overall market.
Despite its slow start in trading with this year’s opening at NYSE BFH currently standing at $29.13 compared to last year’s opening benchmark high ($55.87), some market analysts expect an end-of-year rise in stocks’ value through a predicted EPS of 11.6 for Bread Financial Holdings, Inc.’s running alpha year.
It seems that despite fluctuations in investor sentiments and dipping valuation numbers that there remains optimism that Bread Financial will turn around in a positive direction.
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