BN
📈 Despite an 80% increase in value, Brookfield is still considered undervalued.
🔄 The company spun off its asset management business (Brookfield Asset Management) to unlock value and use it as a currency for acquisitions, such as American Equity Life.
💰 Brookfield has a strong track record of capital allocation, which is expected to be a major value driver.
✅ The company aims to double its assets under management in the next five years, focusing on matching assets with long-term liabilities of an aging population.
@emeritoquintana:
“Of Brookfield, for example, last year I spent twenty-something minutes talking because the price was a bit absurd. I talked about how it was going to earn 43 billion in the next 5 years and that it was trading at 50-something thousand. We talked about the insurance business, the success fees without charging. And today, it’s worth 80% more, but I still believe it is undervalued. It spun off the manager, Brookfield Corporation spun off the manager, and we mentioned that that was to unlock value and to use it as a currency, and that’s exactly what they’ve done. Now it’s trading at like 34 times earnings, and they’ve expanded a bit, well, they’ve sold a bit of the manager’s shares to buy an insurer, American Equity Life. And in these companies, most of the value is going to be created by that capital allocation, and they are very good at it. In them, more will be earned along the way, for what they reinvest and at what return they invest, than the profits of year one. And they have repurchased 1 billion in the last 12 months. And if last year I told you that it earned 5,000 per year, well, it’s already at a rate of 6,000 per year. In the last 25 years, they have managed to create a manager that has a trillion American dollars under management, and in the next 5 years, they want to double it, to achieve another trillion dollars, mainly by matching assets with long-term provisions of an aging population that does not save enough. And that is very interesting. That’s what Apollo does too.”
Watch the exact part of the video where Emerito Quintana talks about Brookfield here:
View the video on YouTube.
Read more articles by the world’s top 100 analysts on Brookfield (BN) at the following link. BN stock.
