Markets Won’t Sink Forever. Asset Manager Stocks Are a Cheap Play on a Recovery.

Asset-management stocks have been hit hard this year in the market selloff, with some down 35% to 45%, almost double the decline in the S&P 500 index. No industry is more directly tied to stock and bond markets, and a bear market depresses assets under management, revenue, and earnings. Profit estimates for 2022 lately have been declining, and earnings are on track to fall below last year’s results.

Yet, even against this deteriorating backdrop, the stocks look appealing. Many asset managers’ shares are trading for 10 times…

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