Brookfield Asset Management Adds a BAM
Vista's Luke Aucoin speaks to the FOX Business Network about Brookfield Asset Management.
Investing in financial stocks has brought a lot of blow-ups lately. But one portfolio manager thinks it's time to take a chance on a BAM -- Brookfield Asset Management (BAM).
Brookfield Asset Management is a global asset manager, focused on commercial and industrial property, power and infrastructure. It has about $95 billion in assets under management, according to the company’s Web site.
Luke Aucoin, a portfolio manager for Listed Private Equity Plus Fund (LPEAX), said the company invests heavily in alternative-energy power plants, power lines, and highways, among other things, in North America, South America, and Europe, making it a good way to participate in the global growth stage.
Aucion likes the stock particularly because of the industry’s high barriers to entry. For example, the start-up costs for creating power plants and building highways are astronomical, which creates an environment with little competition. There aren’t too many other U.S. firms that invest in infrastructure.
There’s always risk involved in these investments, of course, but Brookfield is able to reduce the risk by creating an open public fund for its ventures, the Acadian Timber Income Fund, for example. The company essentially “outsources the risk to outside investors, reducing the risk by 40 to 50%,” said Aucoin.
Compared with the rest of the finance industry, which has been down 20% amid the current subprime turmoil, Brookfield has only taken a hit of 10%. “Their balance sheet is strong because they’re well diversified with tangible assets,” said Aucoin, who suggests the stock is worth at least $40, though it’s trading at around $31.50. Insiders own between 15% and 20% of the company.
Brookfield released its fourth quarter earnings on February 8 and profits were down, but it did extremely well compared to other asset managers, said Aucoin. Cash flow increased remarkably from 2006 to 2007 in spite of the problems in the credit market, he said.
Asked about recession fears and how the stock might perform, Aucoin said Brookfield is in a better position than other asset-management firms because of its tangible investments and the public funds it uses to help finance its ventures. He said it depends on how you look at things, but if you feel like we’re in a slowdown, Brookfield is in a good spot. Because of its diversification, if one of the company’s investments struggles, there are others that can pick up the slack.
People in finance are asking themselves “when is it time to jump into the financial market wholeheartedly or to dip their feet in the waters and this is it because it’s got the tangible assets behind it,” Aucoin said. According to Aucoin, unless we see a complete blow-up in the start-up markets, which isn’t very likely, this stock is a good bet.
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Brookfield Asset Management is a global asset manager, focused on commercial and industrial property, power and infrastructure. It has about $95 billion in assets under management, according to the company’s Web site.
Luke Aucoin, a portfolio manager for Listed Private Equity Plus Fund (LPEAX), said the company invests heavily in alternative-energy power plants, power lines, and highways, among other things, in North America, South America, and Europe, making it a good way to participate in the global growth stage.
Aucion likes the stock particularly because of the industry’s high barriers to entry. For example, the start-up costs for creating power plants and building highways are astronomical, which creates an environment with little competition. There aren’t too many other U.S. firms that invest in infrastructure.
There’s always risk involved in these investments, of course, but Brookfield is able to reduce the risk by creating an open public fund for its ventures, the Acadian Timber Income Fund, for example. The company essentially “outsources the risk to outside investors, reducing the risk by 40 to 50%,” said Aucoin.
Compared with the rest of the finance industry, which has been down 20% amid the current subprime turmoil, Brookfield has only taken a hit of 10%. “Their balance sheet is strong because they’re well diversified with tangible assets,” said Aucoin, who suggests the stock is worth at least $40, though it’s trading at around $31.50. Insiders own between 15% and 20% of the company.
Brookfield released its fourth quarter earnings on February 8 and profits were down, but it did extremely well compared to other asset managers, said Aucoin. Cash flow increased remarkably from 2006 to 2007 in spite of the problems in the credit market, he said.
Asked about recession fears and how the stock might perform, Aucoin said Brookfield is in a better position than other asset-management firms because of its tangible investments and the public funds it uses to help finance its ventures. He said it depends on how you look at things, but if you feel like we’re in a slowdown, Brookfield is in a good spot. Because of its diversification, if one of the company’s investments struggles, there are others that can pick up the slack.
People in finance are asking themselves “when is it time to jump into the financial market wholeheartedly or to dip their feet in the waters and this is it because it’s got the tangible assets behind it,” Aucoin said. According to Aucoin, unless we see a complete blow-up in the start-up markets, which isn’t very likely, this stock is a good bet.
Click Here for Complete Story
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