Mike Williams writes that a "huge catalyst" for Legg Mason's
] earnings will be rising interest rates. The annual money fund fee waivers are taking bps off average advisory fees. If rates normalize, the waiver would decrease and the new money would go to the bottom line. Williams says the absence of the waiver would add $0.80 in pre-tax net income to earnings per share.
Not only that, Wiliams writes, but rising rates should give management some wiggle room to raise fees on fixed income assets.
The firm also plans to continuing buying back shares, Williams writes, buying back $80 to $90 million worth of shares per quarter long-term. The firm bought back 2.6 million shares for $90 million in the fiscal first quarter of 2014, Williams writes.
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