In a note released Friday morning, Citigroup analyst William Katz initiated an Overweight AllianceBernstein Holding LP (NYSE: AB) and Underweight Artisan Partners Asset Management Inc (NYSE: APAM) pair trade.
Katz's view is that AllianceBernstein is emerging from a "multi-year funk" while Artisan Partners' flow momentum has "stalled."
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Six key reason Katz said the trade will generate alpha:
- AllianceBernstein offers "superior" strategic positioning compared to Artisan Partners
- Alliance offers better yield
- The flow at AllianceBernstein is accelerating while volumes at Artisan are "struggling"
- AllianceBerstein offers better margin expansion potential
- AllianceBerstein has a greater potential for an "earnings surprise"
- Deeper upside potential from AllianceBernstein