### BUSINESS

AllianceBernstein Holding L.P. is publicly owned investment manager. The firm also provides research services to its clients. It provides its services to investment companies, pension and profit sharing plans, banks and thrift institutions, trusts, estates, government agencies, charitable organizations, individuals, corporations, and other business entities. The firm invests in public equity, fixed income, and alternative investment markets across the globe. It employs long/short strategy to make its investments. The firm conducts in-house research to make its investments. AllianceBernstein Holding L.P. was founded in 1987 and is based in New York, New York.

### INVESTMENT RATING

** AB is expected to continue to be a major Value Builder reflecting capital returns that are forecasted to be above the cost of capital. **

** AB has a current Value Trend Rating of C (High Neutral). **

With this rating, PTR’s two proprietary measures of a stock’s current attractiveness are providing inconsistent signals. AB has a good Appreciation Score of 76 but a neutral Power Rating of 48, with the High Neutral Value Trend Rating the result.

** AB’s stock is selling well below targeted value. ** The current stock price of $29.32 compares to targeted value 12 months forward of $52.

This high appreciation potential results in an appreciation score of 76 (only 24% of the universe has greater appreciation potential.)

** AB has a Power Rating of 48. ** (This neutral Power Rating indicates that AB’s chances of enjoying favorable investment performance over the near to intermediate term are only average.)

Factors contributing to this neutral Power Rating include: is in a slightly weakened position current; and earnings estimate behavior for AB has been slightly negative recently. An offsetting factor is recent price action has been neutral.

### INVESTMENT PROFILE

AB’s financial strength is high. Financial strength rating is 77.

** Relative to the S&P 500 Composite, AllianceBernstein Holding LP has moderate Value characteristics; its appeal is likely to be to investors heavily oriented toward Income; the perception is that AB is lower risk. ** Low expected growth is a relative weakness for AB. AB’s valuation is low: high dividend yield, low P/E ratio, and low price/book ratio. AB has unusually low market capitalization.

### CURRENT SIGNALS

** AB’s current operations are strong. ** Return on equity is rising, reflecting: and improving asset utilization.

** AB’s current technical position is mixed. ** The stock price is in a 1.4 month up move. The stock has appreciated 26.2% from its prior low. The 200 day moving average is in a downtrend. The stock price is above its 200 day moving average. The stock has just risen above its 200 day moving average.

### ALERTS

AllianceBernstein Holding LP (NYSE: AB) has recently enjoyed significant positive changes in investment behavior: the stock’s recent price rise disrupted its longer term downtrend.

AllianceBernstein Holding LP (NYSE: AB). Minimal negative changes in fundamentals have recently occurred: significant quarterly sales deceleration occurred.

The stock is currently rated C.

On 12/6/19, AllianceBernstein Holding LP (NYSE: AB) stock suffered a major decline of -24.4%, closing at $0.12. Trading volume in this decline was normal. The stock has performed in line with the market over the last nine months and has risen 1.5% during the last week.

### CASH FLOW

** In 2018, AB experienced a very significant reduction in cash of $0.0 million (). Sources of cash were much lower than uses. ** Cash generated from 2018 EBITDA totalled +$270.6 million. 2018 non-operating sources contributed no cash. Cash taxes consumed -$28.2 million (-10% of EBITDA). Withdrawal of investment from the business totalled +$53.5 million (+20% of EBITDA). In 2018, debt investors had no impact on cash while equity investors withdrew -$295.9 million (-109% of EBITDA).

** AB’s Non-operating Income, %EBITDA has exhibited little to no overall change over the period. ** This stability was accompanied by an uptrend for the Alliancebernstein Holding Lp Peer Group. In most years, AB was in the third quartile. Currently, AB is substantially below median at 0% of EBITDA ( $0.0 million).

** AB’s Cash Taxes, %EBITDA has experienced a downtrend over the period. ** This downtrend was accompanied by stability for the Alliancebernstein Holding Lp Peer Group. In most years, AB was in the third quartile and second quartile. Currently, AB is below median at -10% of EBITDA (-$28.2 million).

** AB’s Business Re-investment, %EBITDA has enjoyed a volatile overall uptrend over the period. ** This improvement was accompanied by a similar trend for the Alliancebernstein Holding Lp Peer Group. In most years, AB was in the top quartile. Currently, AB is upper quartile at +20% of EBITDA (+$53.5 million).

** AB’s Debt Investors, %EBITDA has exhibited little to no overall change over the period. ** This stability was accompanied by stability for the Alliancebernstein Holding Lp Peer Group as well. In most years, AB was in the second quartile and third quartile. Currently, AB is slightly above median at 0% of EBITDA ( $0.0 million).

** AB’s Equity Investors, %EBITDA has suffered a volatile overall downtrend over the period. ** This downtrend was accompanied by a similar trend for the Alliancebernstein Holding Lp Peer Group. In most years, AB was in the lower quartile and top quartile. Currently, AB is lower quartile at -109% of EBITDA (-$295.9 million).

** AB’s Change in Cash, %EBITDA has exhibited little to no overall change over the period. ** This stability was accompanied by an uptrend for the Alliancebernstein Holding Lp Peer Group. In most years, AB was in the second quartile and third quartile. Currently, AB is slightly above median at 0% of EBITDA ( $0.0 million).

** AB’s Cash, %Revenue has exhibited little to no overall change over the period. ** This stability was accompanied by a downtrend for the Alliancebernstein Holding Lp Peer Group. In most years, AB was in the lower quartile. Currently, AB is lower quartile at 0%.

### PROFITABILITY

** AB’s return on equity has improved very significantly since 2009. **

This very significant improvement was due to very strong positive trend in pretax operating return and small positive trend in non-operating factors.

The productivity of AB’s assets rose over the full period 2009-2019: asset turnover has enjoyed a very strong overall uptrend.

Non-operating factors (income taxes and financial leverage) had a minor positive influence on return on equity.

** AB’s return on equity is at median (15.0%) for the four quarters ended September, 2019. **

Operating performance (pretax return on assets) is at the upper quartile (16.8%) reflecting asset turnover that is slightly above median (0.17X) and upper quartile pretax margin (100.0%).

Tax “keep” rate (income tax management) is at median (89.1%) resulting in after tax return on assets that is upper quartile.

Financial leverage (leverage) is lower quartile (1.00X).

### GROWTH RATES

There are no significant differences between AllianceBernstein Holding LP’s longer term growth and growth in recent years.

AllianceBernstein Holding LP’s historical income statement growth has been higher than growth in the balance sheet. Revenue growth has exceeded asset growth; earnings growth has exceeded equity growth.

** Annual revenue growth ** has been 7.5% per year. (More recently it has been 15.1%.)

** Total asset growth ** has been -1.4% per year.

** Annual E.P.S. growth ** has been 8.0% per year. (More recently it has been 17.1%.)

** Equity growth ** has been -1.1% per year.

** AllianceBernstein Holding LP’s consensus growth rate forecast (average of Wall Street analysts) ** is 3.7% — in line with the average of the historical growth measures.

** Relative to the Alliancebernstein Holding Lp Peer Group, AB’s historical growth measures are erratic. ** Revenue growth (7.5%) has been at median. E.P.S. growth (8.0%) has been below median. Equity growth (-1.1%) has been lower quartile. Total asset growth (-1.4%) has been lower quartile.

** Consensus growth forecast (3.7%) is slightly below median. **

### PRICE HISTORY

** Over the full time period, AllianceBernstein Holding LP’s stock price performance has been below market. ** Between February, 2009 and December, 2019, AllianceBernstein Holding LP’s stock price rose +141%; relative to the market, this was a -44% loss. Significant price moves during the period: 1) July, 2012 – May, 2013: +109%; 2) April, 2010 – July, 2012: -61%; and 3) February, 2009 – April, 2010: +158%.

### TOTAL INVESTMENT RETURNS

** Current annual total return performance of 10.2% is below median relative to the S&P 500 Composite. **

In addition to being below median relative to S&P 500 Composite, current annual total return performance through October, 2019 of 10.2% is below median relative to AllianceBernstein Holding LP Peer Group.

** Current 5-year total return performance of 10.4% is slightly below median relative to the S&P 500 Composite. **

Through October, 2019, with slightly below median current 5-year total return of 10.4% relative to S&P 500 Composite, AB’s total return performance is slightly below median relative to AllianceBernstein Holding LP Peer Group.

### VALUATION BENCHMARKS

** Relative to S&P 500 Composite, AB’s overall valuation is low. ** The highest factor, the ratio of enterprise value/revenue, is upper quartile. Ratio of enterprise value/assets is above median. Ratio of enterprise value/earnings before interest and taxes is lower quartile. Price/earnings ratio is lower quartile. The lowest factor, the price/equity ratio, is at the lower quartile.

** Relative to AllianceBernstein Holding LP Peer Group, AB’s overall valuation is normal. ** The highest factor, the ratio of enterprise value/assets, is upper quartile. Ratio of enterprise value/revenue is slightly above median. Price/equity ratio is at median. Ratio of enterprise value/earnings before interest and taxes is at median. The lowest factor, the price/earnings ratio, is below median.

** AB has no value gap compared to the median. ** For AB to achieve median valuation, its current ratio of enterprise value/revenue would have to fall from the current level of 11.48X to 11.09X. If AB’s ratio of enterprise value/revenue were to fall to 11.09X, its stock price would be lower by $-1 to $28.

For AB to achieve upper quartile valuation relative to the AllianceBernstein Holding LP Peer Group, its current ratio of enterprise value/revenue would have to rise from the current level of 11.48X to 15.70X. If AB’s ratio of enterprise value/revenue were to rise to 15.70X, its stock price would increase by $11 from the current level of $29.

### VALUE TARGETS

** AB is expected to continue to be a major Value Builder reflecting capital returns that are forecasted to be above the cost of capital. **

AllianceBernstein Holding LP’s current Price Target of $52 represents a +78% change from the current price of $29.32.

This high appreciation potential results in an appreciation score of 76 (only 24% of the universe has greater appreciation potential.)

With this high Appreciation Score of 76, the neutral Power Rating of 48 results in an Value Trend Rating of C.

** AllianceBernstein Holding LP’s current Price Target is $52 (+33% from the 2018 Target of $39 and +78% from the 12/06/19 price of $29.32). ** This dramatic rise in the Target is the result of a +1% increase in the equity base and a +32% increase in the price/equity multiple. The forecasted increase in return on equity has a very large positive impact on the price/equity multiple and the forecasted increase in growth has a slight positive impact as well. Partially offsetting these Drivers, the forecasted increase in cost of equity has a slight negative impact.

** PTR’s return on equity forecast is 20.0% — slightly above our recent forecasts. ** Forecasted return on equity enjoyed a dramatic, variable increase between 2010 and 2018. The current forecast is significantly above the 2011 low of 7%.

** PTR’s growth forecast is 3.0% — in line with our recent forecasts. ** Forecasted growth enjoyed a dramatic, erratic increase between 2014 and 2018. The current forecast is below the 2016 peak of 5%.

** PTR’s cost of equity forecast is 8.3% — above recent levels. ** Forecasted cost of equity suffered a dramatic, steady increase between 2010 and 2018. The current forecast is well above the 2011 low of -0.0%.

At AllianceBernstein Holding LP’s current price of $29.32, investors are placing a negative value of $-4 on its future investments. This view is not supported by the company’s most recent performance that reflected a growth rate of 2.0% per year, and a return on equity of 15.4% versus a cost of equity of 7.6%.

PTR’s 2020 Price Target of $52 is based on these forecasts and reflects an estimated value of existing assets of $41 and a value of future investments of $11.

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