Zachary Curry Brookfield Corp BN-T STRONG BUY Jun 04, 2024

The love of his life, which they've owned for quite a long time. Likes that it collects giant fees from diversified assets. His preferred play on alternative assets. Headwinds from tariffs and regulations, but those are dissipating at the moment. 

Terrific track record long term, despite this year being tough. Compounded shareholder return of 18% over last 30 years. Growth will come from selling new products to retail investors in insurance, real estate, private equity. Volatile markets will work in its favour.

Long-term winner. Chart looks great. You can see the tariff tantrum, and now the stock looks as though it wants to push higher. A Canadian stalwart. Great long-term buy and hold. Corrections are always a great time to add.

It is a storied asset manger and owns many baby Brookfields. He really likes the management and company but the stock is expensive. As a value investor he wants a decent sized correction before buying. He has concerns re the private equity space, in particular defaults or lower valuations, which would affect asset management fees.

One year ago it was trading at a discount to NAV and has ownership in 4 publicly traded subsidiaries. The prior 10 year return to shareholders was 15% and you can expect the core distribution earnings to be about 17%. It is fine to start accumulating for the long term or you could wait for a pullback. It is a long term success story.

Complex organizational structure and accounting oddities often confound traditional ratio analysis when trying to gauge valuation. You can look at PE (14x) or P/B (2.2x). His team doesn't rely on those metrics. More simplistic and reliable would be the dividend yield; paid for a long time, commitment to growing.

Dividend yield right now is about 0.6%, so on that basis the shares are expensive. For context, over the last decade the average has been 1.5%. So instead, you want to try to identify a secular business trend that will lead to a rerating. He thinks that's the case here. Global leader in private market alternative investments. Benefiting from secular trend away from just investing in publicly traded stocks and bonds. Great leadership.

Not meeting his financial matrix right now. Complexity on steroids, really hard to understand what it's doing. Incredible Canadian success story. As long as there's global financial liquidity in the system, this name does great. If liquidity comes out of the market, which it would if interest rates go up (and he's concerned about this for late this year or next year), then BN really struggles.

He might be interested if it really got compellingly cheap enough.

Tremendous compounder of wealth for shareholders. This, the mother ship, benefits from all its various income streams from subsidiaries. 

An ideal weight, and that level already in place makes it sound as though the investor's portfolio is diversified. But take a look at BBU.UN.

Price of each share will drop by 1/3. Hold your shares and don't worry. Big opportunity was to get listed in the US and become part of the US market, as its US-listed competitors trade at 40-50% higher valuations.

BN has been consistently near the top of our growth favourites and we consider it a solid 'buy and forget' type of stock. EPS of 88c missed estimates of 90c; revenue of $18.08B beat estimates of $10.13B. Net EPS did fall year over year. A 3 for 2 stock split is planned for October. Deployable capital is a record $177B. Asset management had a 16% increase in fee-related earnings. Distributable earnings rose 13% year over year. BN sold $55B in assets. All-in, as usual, there was lots to digest. But the underlying trend of growth in cash flow continues strongly, and we remain fully comfortable here. 
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