My story is that I’m 86 and still going strong but find that my analyzing skills are getting more difficult to understand. I’ve been investing for about 15 years but really started enjoying the returns after finding Saul’s board. Now I really like my portfolio. But at 86, I think it’s about time to put some of my profits into something that has a good return and maybe not so volatile. Enter Blackstone Group, symbol BX. It was recommended by an ex broker friend of mine. After looking at the numbers they look pretty good. Fee earning assets under management were $277 billion and dry powder was $101 billion. (I really don’t understand what dry powder means.) They have more cash than debt, an A-plus credit rating and a remarkable ability to borrow cheaply. In October it raised 600 million euros ($640 million) at 1% interest for 10 years. Their selling price is $32.58 and a price target of $40.00 and eps of 9.9%.There is a great article on the company in Barons titled Blackstone Units Have 40% Upside and Yields More Than 8%. If you’re interested just Google it and it comes right up.
I know with all the intelligence here if some of you could respond it would be appreciated.
Thanks.
Gayle - Blackstone who I have had direct experience of are utter class. Completely elite in the fields of PE/Investment banking, they make Goldman Sachs look like high street retail bankers.
Bx have been featuring in my portfolio reviews this year as well as recent Q1 earning reviews if you want to check back and I have been topping up in the last few months. BX really hit the jackpot in Saudi last week as well.
I like and hold. Forget about the $40 target - their management reckons they will be $100 in 3 years.
Gayle- put BX in the ticker or keyword box on this page. There is a good article by the Fool and it explains what dry powder is. Thanks for bringing this to my attention.
Bruce
Thanks to all that have responded. Very helpful indeed.
Mauser96-I don’t quite understand the “why bother”. Did you mean don’t buy any BX and just buy SPY?
BX does pay a pretty good dividend that SPY doesn’t. Am I interpreting this wrong.
Unless I got on totally the wrong track checking into this, BX is a limited partnership and that means complications for your taxes, even in an IRA if you make over $1000 in BX (or possibly all combined LP?) dividends. There was a good discussion earlier on this board talking about limited partnerships and what they mean for taxes. So, just be aware and verify before you dive in.
Steve, I would like to read some of those discussions. Is there a shortcut to finding those threads. Don’t want to try looking through all of them.
Thanks.
Gayle
It does pay a stonking dividend which the SPY does not but you can’t ding it just because it does and then compare it with SPY - BX might not be a classic Saul Method stock but certainly SPY index investing is not Saul Method. Whilst I love the double digit yield I rate the stock as a PE growth play in its own right and for the super high conviction I have in the top talent in the PE industry to make high returns - it’s about 1.3% of my US port.
Recent results tho were very Saul like…
Blackstone:-
Q1 EPS of $0.82 (+164.5% Y/Y) beats by $0.14
Revenue of $1.94B (+108.1% Y/Y) beats by $350M
Fee earning AUM increased 15% - fee related revenues are ~1/3rd of total economic income.
All AUM parts of the business grew between single digits and 18% (credit) https://s1.q4cdn.com/641657634/files/doc_financials/2017/q1/…
BTW 3 years comparison vs SPY is just timing. SPY has beaten BX on 3 and 10 year intervals, BX has beaten SPY on YTD, 1 and 5 year.
On the LP structure - Given that I am not a US citizen I am unaffected by the paper trail but it’s an important consideration for Americans - B&W can comment on that more.
Ant
Does it really? I looked on Google Finance for the dividend history and it looks more like 5%. Was there a one-time dividend? What are expected dividends going forward?
I wouldn’t say that a whole category of stocks is OT on this board. Right now Saul is mostly invested in tech stocks but his method doesn’t specifically exclude the financial industry. If there are stocks, regardless of industry, that have a chance to appreciate substantially then they can be discussed here. I’ve been scouting for financial stocks.
MLP’s are off topic on this board. There is a “Master Limited Partnership” board on MF that would be the right place to direct your inquiry.
I wouldn’t say that a whole category of stocks is OT on this board. If there are stocks, regardless of industry, that have a chance to appreciate substantially then they can be discussed here. I’ve been scouting for financial stocks.
Hi Chris, B&W is correct. This board is for discussing growth stocks. Discussing Master Limited Partnerships as a group is off topic for this board and should be discussed elsewhere. The Basic Rules of the Board at the beginning of the Knowledgebase makes clear that this is a board for discussing growth stocks, not stocks focussed on dividends, or turn-around stocks, or break up the company into parts and sell it off stocks (although they all may “appreciate substantially”).
But you are correct, there’s nothing wrong with discussing financial stocks, if they are seen as growth stocks (Bofi and Signature Bank have been two recent examples). MLP’s though have a very complicated tax structure, and are a subject all their own, and past discussions have gotten really way off topic discussing the intricacies, which is why they are better discussed where they belong. This thread now has 13 posts on it so it’s not being cut off too quickly, so let’s please terminate it here on this board.
Sorry, I just remember that someone brought up an MLP on this board at least a couple of months back and there was discussion about the tax implications. I don’t recall the thread and don’t have a link for you. I once bought an MLP in one of my IRA accounts unknowingly and once I learned about the tax implications I quickly sold out so that I wouldn’t have to worry about it. They seem to be good investments for people who understand how to handle the tax reporting and don’t mind the effort. I believe they can offer a tax advantage in a regular account but once I decided not to mess with them I really didn’t dig any further.