May 16, 2012
Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of asset manager Legg Mason (NYSE: LM ) jumped 11% in intraday trading after announcing financial news.
So what: The company said today it would repurchase $1.25 billion in convertible senior notes from KKR (NYSE: KKR ) . The board of directors has also authorized an additional $1 billion in share repurchases, continuing a repurchase program at the company.
Now what: The company will be selling new senior notes to pay for the debt repurchase so it doesn't change the company's debt level dramatically. As of March 31, 2012, the company had $1.4 billion of cash on hand as well, so there's plenty to fund the stock repurchase. I see this as a positive for shareholders but would like to see the stock come down from its high today before buying in at a premium.
Interested in more info on Legg Mason? Add it to your watchlist by clicking here.
More Expert Advice from The Motley Fool
The Motley Fool's chief investment officer has selected his No. 1 stock for the next year. Find out which stock in our brand-new free report: "The Motley Fool's Top Stock for 2013
." I invite you to take a copy, free for a limited time. Just click here
to access the report and find out the name of this under-the-radar company.