Facebook (FB) Slowing Growth Could Lead to Better Investing Entry Point in 2019.
FB revenue growth might slow from 40% to the 20-30% growth as the company matures, user growth stalls (in US & Europe) and expenses ramp up due to increased spending on Investment in Security and Regulations.
A price per share of $150 when forward EPS is projected to be $9 offers an appealing risk reward in our opinion. FB 2018 EPS projected is $7+ and currently shares trade between $165 to $185.
Tuesday, August 14, 2018
Brookfield Business Partners Update - Westinhouse Purchase & Graftech Monetization
Brookfield Business Partners (BBU) Closes Westinhouse Purchase which Equity Investment of $420M. This investment over the next 3-5 years has the potential to be a 5 to 10 bagger if Brookfield can expand the service offering and add enhance customer service and broaden the portfolio with synergistic acquisitions.
BBU has started monetizing the Graftech investment which has been a 10 bagger so far worth a total of $2.7B so far. Prospects are good to monetize the North American Palladium investment as well over the next 1-3 years.
Company continues to progress the business plan at BRK Ambiental, Greenergy, Canadian Gaming and Gas Station Assets, Teekay Offshore etc. The Construction Services business Multiplex has been disappointing and will likely take 1-2 years more to turnaround and get to stage of providing dividends to BBU.
Target price for BBU is $50 by 2019 end and the growth prospects are very strong over next 5 years.
BBU has started monetizing the Graftech investment which has been a 10 bagger so far worth a total of $2.7B so far. Prospects are good to monetize the North American Palladium investment as well over the next 1-3 years.
Company continues to progress the business plan at BRK Ambiental, Greenergy, Canadian Gaming and Gas Station Assets, Teekay Offshore etc. The Construction Services business Multiplex has been disappointing and will likely take 1-2 years more to turnaround and get to stage of providing dividends to BBU.
Target price for BBU is $50 by 2019 end and the growth prospects are very strong over next 5 years.
Brookfield Asset Management 2Q2018 Update
Brookfield Asset Management (BAM) 2Q2018 results were on trend as expected.
Total AUM was $287B, Fee Bearing Capital increased 12% to $129B, Fee Related Earnings increased 34% to $1.1B and Annual run rate of Fees plus Target Carry increased 23% to $2.6B.
In the last few months BAM have advanced or completed a number of large transactions – including the acquisition of the balance of GGP for $15 billion, a large mid-stream natural gas gathering system in western Canada for $3.3 billion, the closing of the acquisition of Westinghouse Electric Company for a total purchase price of $4 billion, the commitment to acquire Forest City Realty Trust and Enercare for $6.8 billion and $2.5 billion, respectively, and the acquisition of a number of solar and wind facilities in Spain for $1.2 billion.
Brookfield is in the market to raise the next Real Estate Fund and Private Equity Fund and plans to start raising the next Infrastructure Fund from 4Q2018.
We believe BAM shares are worth $50 today with $22 attributed to Asset Management Franchise and $28 attributed to Balance Sheet Assets. It is likely that growth over next 4-5 years will lead to $80+ with Asset Management Franchise worth $40 and Balance Sheet Assets worth $40.
Brookfield 2Q2018 Results
Total AUM was $287B, Fee Bearing Capital increased 12% to $129B, Fee Related Earnings increased 34% to $1.1B and Annual run rate of Fees plus Target Carry increased 23% to $2.6B.
In the last few months BAM have advanced or completed a number of large transactions – including the acquisition of the balance of GGP for $15 billion, a large mid-stream natural gas gathering system in western Canada for $3.3 billion, the closing of the acquisition of Westinghouse Electric Company for a total purchase price of $4 billion, the commitment to acquire Forest City Realty Trust and Enercare for $6.8 billion and $2.5 billion, respectively, and the acquisition of a number of solar and wind facilities in Spain for $1.2 billion.
Brookfield is in the market to raise the next Real Estate Fund and Private Equity Fund and plans to start raising the next Infrastructure Fund from 4Q2018.
We believe BAM shares are worth $50 today with $22 attributed to Asset Management Franchise and $28 attributed to Balance Sheet Assets. It is likely that growth over next 4-5 years will lead to $80+ with Asset Management Franchise worth $40 and Balance Sheet Assets worth $40.
Brookfield 2Q2018 Results
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