Joshua Varghese Blackstone Group LP BX-N TOP PICK Oct 08, 2024

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. 

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

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.

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

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.

It reports Thursday. They have a giant data centre business within their company. Blackstone will tell us otherwise, that the data centre them is not over. It could help the semis stocks.

Under pressure along with all the rest in private equity. Trouble finding liquidity for a lot of their deals. With rising rates, power is now in the hands of the lender, but private equity firms are huge borrowers. Stay away.

Chart had well over a year of going nowhere, and then broke out without retracing and went to the moon. Now it's pulling down. The next thing you'll look for is where could it land, and the chart shows that that's where it is right now -- old resistance becomes new support. His book Sideways explains why.

Chart's bouncing off that support, which is very positive. He'd be legging in. If it breaks below ~$130 or so, that's bad news. For now, it's above that, so put a leg in. Your stop loss is the old resistance level, the place to sell.

We think it may still have room. Much will depend on interest rates but they do appear to be set to head lower. Deal activity has increased after a 'tariff pause' in April and May. Consensus still calls for very good earnings growth over the next two years. 
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