Franklin Resources is one of the world’s largest mutual fund companies, with leading products in both equities and fixed income. Franklin is also well-situated internationally, managing over $3 billion in local assets in 18 countries. The company has deliberately built this international presence over decades, and we believe this provides, and will continue to provide, a distinct competitive advantage. With consensus earnings for 2012 expected to be nearly $9 per share, Franklin is selling for just less than 14x earnings. We adjust that number for the cash and investments on Franklin’s balance sheet, which at year-end totaled about $24 per share and were not producing much income. Adjusting for those investments, the business is priced at just over 11x earnings. Given Franklin’s strong fund performance across various asset classes and geographies, we believe this valuation is attractive. Management has historically returned capital to shareholders through stock buybacks and dividends, and with insiders owning 35% of outstanding shares, we expect Franklin to continue to be good stewards of shareholders’ capital.