Stockchase Opinions

Christopher Blumas Blackstone Group LP BX-N COMMENT Sep 17, 2019

They converted from an LP to a corporation which attracted a different shareholder base (index funds). This shift spiked their valuation. He owns BAM instead, which shares the same drivers as BX: low yields, pension plans and institutional investors. These stocks are essentially synthetic bonds with assets. Trades at 15x forward distributed earnings. BX is a well-run company in a shareholder-friendly space.
$53.520

Stock price when the opinion was issued

investment companies funds
It's the ideal tool to help you make quicker, more informed decisions for managing and tracking your investments.

You might be interested:

BUY ON WEAKNESS
1-year high, sell?

Not negative on it. Well run. $1T of assets employed in the private markets. Will benefit from lower interest rates, could see positive moves off that. Not inexpensive. Watch, try to enter at a lower level.

BUY

Is up 20% in the past month. Private equity companies are benefitting huge from lower interest rates with the core business doing leveraged buyouts.  BX was down because of its exposure to real estate, but that's no longer a problem as interest rates have peaked.

PAST TOP PICK
(A Top Pick Dec 14/23, Up 52%)

Excellent management team very strong at capital allocation. Focus on real estate created difficulties during higher interest rates. As rates stabilize, business will perform well. Will continue to own shares. 

BUY

Private equity is interesting here. They raised $59 billion in equity in Q4 and hold $200 billion in free cash flow to deploy. He just bought it. 

BUY

Holds shares in income growth fund. Private equity business located in the USA. Has been liquidating unprofitable business positions. Expecting better performance of share price going forward. Difficult to value company on a NAV basis, but is a quality company. 

HOLD

It has value and the CEO is great, including a great data centre. However, private equity is in a rocky moment now.

BUY

He bought more. It's lagged its peers and they slightly missed EPS, but they started this year with $200 billion cash and have invested $50 billion mostly infrastructure and private credit. He thinks net realization rates will increase going into 2025.

DON'T BUY

Has recovered well in recent years, but it's private equity, which is opaque--what do they own?

BUY

He's invested heavily in private equity, and those businesses have grown ~15% a year, which is reflected in the stocks. No reason for this to slow down, long runway. Pick your poison, buy one or all of BN, APO, KKR, or BX. Next 5 years should be a minimum of a double.

TOP PICK

Allocations to alternative assets will only increase; they've increased 12.5x over the last 10 years (vs. 4x for regular assets), from $25 trillion today to $65 trillion by 2032. They invest big capital in areas like infrastructure and private credit. Not cheap, but worth it.

(Analysts’ price target is $140.73)