Brookfield Corp (BN.TO)

Global leader in wealth management. Real estate appears to be turning the corner. If soft landing, one of his favourite plays. Fed rate cuts and rising liquidity should help shareholder returns. Trades at 10x price to adjusted funds, growing at 26%. Yield is 0.78%.

Ticks all boxes of offense and defense, growth and value. You don't have to sweat this name, a great performer all the time. Again, not if it goes higher, but when.

Very strong business with excellent array of assets. Real estate business strong (and undervalued). Expecting more people to return to office. Strong management team that is founder led. Insurance business growing nicely too. 

Management has done a great job retaining talent. Close to $900B in assets under management. A behemoth. Trading attractively at 13x earnings.

On his watchlist. Downtrend broken, as is resistance. Could probably get to around $63. If he's right about market being overbought, could get a pullback, as all ships will fall with the tide. Likes the chart, rebound looks intact.

Complex business model that is hard to value. Better names to get exposure to in private equity space. Would not recommend to investors. 

The question was on his choice between BN and BAM. BN is Brookfield Corporation which is the old Brookfield Asset Management. BAM is the new Brookfield Asset Management. This is a result of re-structuring done in 2022. BAM has a better dividend, almost 4%, but not as much growth. BN has a small yield but more growth. It is leveraged to the economy and makes money when they sell something, so their income is lumpier than BAM. Since 2022 the total return on BAM is 28% and BN is 10%.

Likes the stock. Underperformed. BN and BAM are closely correlated. BAM just reported, increased dividend, a nice beat that some are saying merely due to taxes. He models outsized growth for 2024. Pretty attractive risk/reward. 22x, 17% distributable EPS growth. Buying at these levels will work.

A giant with many companies in many industries like real estate and private equity. The appeal of the latter is that it's less efficient than public markets, so it's easier to find mispricings. Also, given BN's scale and size, sellers approach them first before entering a competitive auction. Also, BN benefits from the secular trends of divesting from public into private markets. He owns several Brookfield stocks.

He feels strongly about the value of owning the parent, BN, rather than owning one of the subsidiary pieces.

Thinks it will be largest company on TSX in a few years. Mind-boggling amount of growth to come. Amount of money moving to alternatives is gigantic. 50% of asset base collects fees, and that base is increasing. Benefits from big themes like decarbonization and digital economy. Global. Cheap valuation. Lagging US peers due to worries over its 35% portfolio allocation to bad real estate, but most is running strong. Yield is 0.8%.

BN owns a percentage of BAM. BN is trading at a discount to NAV, widest discount in a long time, which is why you want to look at buying it here. Working at home has hurt BN's commercial properties. BN has raised lots of capital, great company, well run. BAM and BN are two of the best businesses you can own.

Core holding. Real estate has been an overhang. Company would argue that its holdings are high quality in good locations. Despite rise in interest rates, demand for alternative assets hasn't declined. Successful fundraising. Benefits from rates going lower. Excellent long-term hold for a growth company.

Many levers to pull to capitalize on value. Strong platform for growth.

Other private equity players have performed better. Hurt by real estate overhang. Valuation less than 11x distributable cashflow. Will always trade at a bit of a discount to sum of the parts, as it's the holding company. Free cashflow yield is north of 7%, exceptional value. Really good management. Good compounder at attractive price. He'd continue to buy.