Recommendation: Buy Blackstone (BX) Green&Gold Fund
Key Investment Points • Dividend play with embedded call option on prosperity • Increasing AUM despite low stock price • Big real estate player • Dividend immune to proposed new tax law • More value today than a year ago • Improving operating cash flow
Industry Overview • Focus on operational excellence, growth, performance, risk management, and compliance • Asset Management CEOs most optimistic out of any industry • Very capable of adaptation and reinvention • Transition taking place in risk taking • Opportunities are plentiful
Blackstone (BX) Company Profile
Profile
Growth
Financial Strength
Investment Information Prev Close: 1 y Target Est: 52 wk Range: Avg Vol (3 m): Market Cap: P/E (ttm): EPS (ttm): Div & Yield: 3 Year Price Graph (Morningstar) Forward P/E: 13. 63 17. 50 10. 51 -19. 63 3, 884, 600 6. 59 B N/A -. 35 0. 40 (3. 10%)
Stock Price since IPO
YTD Stock Price
Performance Fees
SWOT Analysis SWOT analysis, and how each point impacts company EPS/valuation multiple Strengths Scale and brand Breath of business lines Proven investment process Stable, consistent investment team Weaknesses Uncertain realization cycle More opportunities to buy than sell Unrealized mark to market losses in PE and RE Opportunities Broad network of relationships to find deals European asset sales Volatility and value dislocation Significant “dry powder” to use Future Performance Fees Threats Grow to big to fast Prolong period of low realizations (stock remain range bound) Key management and relationships leave the firm
Book Value
Investment Thesis • We should own this stock due to guaranteed revenue from increasing AUM, call option on performance fees, solid dividend, and improved valuation.
Portfolio Placement / Recommendation Sector : Alternative Industry Group: Asset Management Current Holdings: ODMX, PRPFX, MOO, GXG Target Sector Allocation: 10%, $43, 765 Current Sector Allocation: 8. 1% , $35, 158 Remaining Allocation: 1. 91%, $8, 318 BUY 400 shares of BX at Limit Price of $13. 50 (approx. $5, 400, 1. 24% of portfolio) Allocation after purchase: 9. 32%
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