Stock Analysis/Presentation Blackstone $BX
First of all a thanks to. @Barsten , who requested a post on Blackstone.
Structure:
1. numbers
2. business model
3. growth?
4. risks
5. my personal opinion about business management
6. sources
7. announcement
1. numbers
(in Euro)
(30.08.22)
Share price: approx. 96 Market cap. 120 bn.
P/E ratio 17.99 Div. yield. 5,92%
Sales 2020: 05.7 bn.
Sales 2021: 09.9 bn +79.03%
Sales 2022e: 12.9 bn +30.03%
EBITDA 2020: 03.4 billion
EBITDA 2021: 06.1 billion +80.3%
EBITDA 2022e: 06.7 bn +09.72%
Outlook:
Sales 2023e: 14.5 bn +12.4%
Sales 2024 e: 15.9 billion +09.7%
EBITDA 2023 e: 08.6 billion +28.4%
EBITDA 2024 e: 10.1 billion +17.4%
2. business model
"The Blackstone Group Inc." $BX is an investment company that is one of the largest in the world in the field of alternative investments. The company makes loans, runs hedge fund strategies, is active in the private equity (non-listed companies) sector and in the real estate sector.
Blackstone is invested in warehouses, in student residences in England, owns music rights, shares in Oatly, in general it can be said that Blackstone has a broad portfolio.
Real estate (real estate) accounts for 43.4%, private equity 37.7%, loans 10.3% and "Hedge Fund Solutions" 8.5% of sales.
3. growth?
From 2020 to 2021, the company achieved a growth in EBITDA and sales of about 80% each, 2021 to 22 a growth of 30 (resp.10) % is expected... but where did these huge jumps come from? The share price also doubled during this time, so there must be a reason why the company has grown so strongly...
And one reason for the growth has already been mentioned: they own warehouses...
in times of supply bottlenecks it may seem idiotic at first sight (because you don't have something, you don't have to store it) to own a lot of warehouses, but exactly the opposite is the case: especially in times of supply bottlenecks warehouses become relevant for the survival of companies: If a microchip is not available for the production of a car, the car cannot be produced. Now, either all the individual parts or unfinished cars (depending on how the supply bottleneck is handled) have to be stored somewhere. If they are not stored, a bottleneck could result from increased demand when the previously missing part becomes available. The principle of just in time and just in place (something is delivered in such a way that you get it exactly when you want to produce it, so hardly any storage space is needed) which is strongly represented by car companies in particular (yes @AufKeinenFallElonMusk even with Tesla) can no longer work, this is also the case with many companies outside the automotive industry, a sudden, huge demand arises and storage space rental companies profit.
But $BX has not only grown in real estate, the company did not do badly in their investments either, they grew in this area by almost 100% (in one year) to name a few interesting stocks from their portfolio: Bumble (dating platform), Refinitiv (provider for financial market data), Great Wolf Resorts (water parks), to choose from the 115 different companies is not so easy 😅
But after all, stocks are very rarely about past profits, it's more about the future and the prospects for it. From 2021 to 2024, sales are expected to grow by about 50%, net income by about 30%. This is to be achieved through renewed strong growth in the real estate, investment and credit areas.
The US election in 2024 is likely to play a special role here, should Trump be re-elected, this would probably be highly financially rewarding for the company, the CEO of Blackstone is considered a great Trump supporter and became a political advisor to Trump after the election was won (2016), which also proved financially rewarding for BlackRock (according to the NY Times), history could repeat itself. Even after the capitol storm caused by Trump, Schwarzman remained loyal to Trump, which would be a great benefit if he was reelected
(personal comment: hopefully not)
should again be reflected positively in the figures.
However, Blackstone's CEO is not only well connected in the ranks of the Republicans; he also has connections to the BlackRock CEO, who is considered the most powerful man in the world. In his role as political advisor, he is also said to have been in direct exchange with Chinese President Xi.
But aside from the political situation, if the supply problems continue for much longer, Blackstone is likely to benefit, with demand for warehouses expected to rise significantly again this year according to some experts. (although opinions differ here)
Now to return briefly to specific numbers:
Also for dividend hunters like @GoDividend the share should be interesting, in the following years the distributions will be increased, the payout ratio should be 75-80%.
4. risks
Debt:
The company is currently still in debt, but the plan for the period up to 2024 calls for it to reduce its debt completely and build up its own capital. This lowers the risk and seems to make sense when interest rates are rising, as @Divmann clarified in the comments under another post, the current inflation situation is positive for indebted companies. In Germany, Vonovia, for example, is suffering because the different accounting makes the situation look unfavorable. It is also often common for long contracts to index rents to inflation.
Ill-considered investments
In 2020, Blackstone made a very imprudent investment (always easy to say in retrospect XD): they invested about $200 million in Oatly. On the surface, one might have few problems with it now....
For Oatly customers, however, this partly became a reason to boycott the company, as one could neither deal with the proximity of the $BX CEO to Trump, nor with investments of $BX in coal or deforestation of the rainforest. This has damaged the name Oatly and thus the investment.
5. my personal opinion on the company management
I'm not a Trump fan, not a fan of cutting down forests, a fan of democracy (which clashes with Trump, who is demonstrably working anti-democrat), not a Republican, and yet I'm buying this stock?
I try to keep ESG/political views out of my investment decisions in most cases, as I think this restriction is detrimental to returns, you can also have a positive impact with your share after buying it (I recommend my last post on this), but I still want to criticize.
By the way, one could also criticize Musk for having advised Trump politically, but here it's a bit different: Elon Musk was advising, but according to his own statements he was working for a better climate and thus against Trump's oil nearness. Whether you like Musk or not, accusing him equally as Schwarzman of backing an anti-democratic politician is nonsensical; Musk is said to have often taken counter-positions to Trump, according to media reports.
I could not find any recent headlines on rainforest deforestation, so I hope with reference to Blackstone's ESG regulations that a significant change has occurred here. When asked by Investor Relations if there are still connections between Blackstone and rainforest logging, a connection was denied.
To summarize the content of Blackstone's response:
the company Hidrovias had been falsely blamed for the clearing of rainforest (during the construction of an "industrial"(?) road),
the accusations were misleading and obviously false. However, in 2021 they had sold their shares in the accused company.
(an excerpt of the answer is in the pictures)
In an official statement on the same subject (https://www.blackstone.com/blackstone-hidrovias-brazil/)
you can read yourself deeper, if you are interested in the topic
From a purely financial point of view, the CEO (also known as the "king of wallstreet") as a genius and gifted, the impact I can evaluate poorly based on the ESG rating (see pictures below), but as I have already explained in my ESG critique is an impact in other ways also effective,
the same opinion was presented a few days ago at the Nobel Laureate Conference in Lindau by one of the speakers....
(so at least the podcast Alles Auf Aktien a few days ago)
🤔 whether the probably read my post 🤡😂
Because of the economic further positive outlook I will continue to buy, this is of course not investment advice (as in all my posts)
6. sources
https://www.crunchbase.com/hub/blackstone-group-portfolio-companies
https://de.wikipedia.org/wiki/Blackstone_Group
https://www.finanzen.net/schaetzungen/blackstone
https://s23.q4cdn.com/714267708/files/doc_financials/2022/Q2/Blackstone2Q22EarningsPressRelease.pdf
https://ir.blackstone.com/overview/default.aspx
https://de.marketscreener.com/kurs/aktie/BLACKSTONE-INC-60951400/
https://www.nytimes.com/2021/01/19/business/schwarzman-blackstone-trump.html
https://eulerpool.com/aktie/US09260D1072
esg report Blackstone:
https://www.blackstone.com/our-impact/an-integrated-approach-to-esg/
#trump
#musk
#regenwald
#derebete
#esg
7. announcement
I've been planning for a few months on a fact-based forecast series along the lines of, "What happens if China attacks Taiwan?"
Of course, I hope that this prediction will never come true, but I still think it is extremely exciting and also an advantage to know what to do should the worst happen....
Stay tuned 😉
