Blackstone Group LP (BX)

They have done a great job. They are raising a lot of money. It is still a limited partnership. When KKR converted to a company, you saw the stock price jump up on conversion because people then buy it because it is part of the index. (Analysts’ target: $41.08).

(A Top Pick June 22/17 - Up 12%.) Up 21% including the dividends. The largest private equity company in the world. They have $100 billion in cash as firepower. In the US there is a big push from pension plans to go to alternative asset classes.

(A Top Pick May 1/17 - Up 23%.) The largest private equity company in the world. Has a great dividend yield. A great story. They are not a corporation therefore not on the S&P 500. With the tax changes there is a rumor that they will become a corporation and be part of the index and would get a bump. Outside of that, these guys have been very astute.

(A Top Pick Aug 10/17, Up 5%) Most of the return is from the dividend. It trades 8-9 times PE and pays a good dividend. If it were not a limited partnership, it would be in the S&P index. KKR-N is considering changing to a corporation for this reason and if it goes well, BX-N might do the same thing.

He won't comment on this company, but the space instead. In the private equity industry, the best time to buy assets is during economic distress when they're cheap. Those assets go into the company's funds and rise in value. The best times to buy PE companies is during pullbacks like 2008-9 and 2011 which then benefitted from the recoveries. Also, credit spreads are narrow now and if they widen that becomes a problem, because these companies borrow to finance their purchases. He's not involved in private equity.

(Past Top Pick on April 13, 2017, Up 24%) The largest private equity company in the world. A catalyst are the changing tax laws in the States. They're grown aggressively. They have $100 billion of cash to buy new deals. It's a good time to exit parts of their operation. Many US pension plans hire Blackstone to handle their private equity.

(January 12, 2018, Down 5%) The fees they earn off their business are consistently rising. BX could convert into a coporate structure from an LLP one; this means more people can own the stock. It trades at 10x earnings and pays an 8% dividend.

Owns another company in this space. It's an alternative asset manager. They're raising money to make future investments. You want some stocks in alternative investment companies, but BX is volatile. If you own it, that's fine.

The success of this will be driven by interest rates remaining reasonable and continued growth in the economy. The MLP format changes will likely favour this one on balance.

(A Top Pick March 8/17 - Up 8%.) The largest private equity company in the world. Has a great dividend yield. A great story. They are not a corporation therefore not on the S&P 500. With the tax changes there are rumors that they will become a corporation and be part of the index and would get a bump.

He never liked this. It's too opaque. They may be a great money manager, but you don't know what they own. They don't disclose well. Yield above 10%.