Comments on: Accumulating Blackstone (BX)

By: Stephen Schwarzman

Stephen Schwarzman — Sun, 02 Dec 2007 20:56:43 +0000

November 30, 2007 BX closing price @ 4:00pm ET:

$22.00 -0.04 (-0.18%)
Open: 22.63
High: 23.04
Low: 21.80
Volume: 2,378,985
Avg Vol: 3,086,000
Mkt Cap: 5.59B

As Blackstone Group (BX) approaches 52 week lows, and faced with short term lingering uncertainty of overall market health — specifically financial sector viability, BX appears to be a bargain for long term holding. With limited insider trading and institutional investors holding strong, you can count on a few investors taking a little off the table as it starts to recover, however as the market outlook improves, BX will be well positioned.

~ Stephen Schwarzman

http://www.BlackstoneStockAnalysis.com

By: Alan

Alan — Wed, 21 Nov 2007 05:52:15 +0000

Chris:
a question about EPS of BX:its EPS estimate is around 1.70, but on MSN money, it is $9.66, and $12(ttm). how to explain it?

By: Chris

Chris — Tue, 13 Nov 2007 15:10:11 +0000

AB,
I write in real-time so my setup was based on that day’s price. However, see the note I made in the post about my personal shares:

“*Note: I have been accumulating prior to today’s write-up.”

My cost is lower than the suggest buy point in the post. I had been accumulating shares prior to the post and I clearly stated that.

I am still in and holding with my 12% stop loss. I am maxed out and can no longer accumulate shares because it will raise my risk exposure in this stock.

By: AB

AB — Tue, 13 Nov 2007 15:02:10 +0000

Chris – I would like to hear your comments on managing the BX entry. According to the original analysis, if someone accumulated shares at the ideal entry of $25.50, the maximum risk is $3.06. That would mean you got stopped out yesterday, however you still like the stock and its prospects. How do you cope with the emotions of still liking the trade, but your system says to cut your losses?

By: JD

JD — Mon, 12 Nov 2007 05:17:25 +0000

Couple of things…

1. You should be aware and make readers aware that the publicly traded BX is actually 20% of the whole Blackstone company.. so the P/E is actually 1.77×5.. and the market cap is roughly 30B..

2. I agree that BX is a strong buy – great mgt (Schwartzman took the company from 700K to 30B I’m willing to bet that he continues his strong performance); very involved in China/India (just wait for a couple of years until they start spinning off IPOs); the company is well diversified with its feet in cash flow generating businesses as well as more growth oriented industries in growing markets

3. Chinese gov’t stake is HUGE; just look at how the Chinese govt looks to help Baidu at every turn

Ha, these are pretty unscientific reasons to back up your more thorough evaluation of BX.. I do feel very strongly that BX will go up to around $50.. I think it follows in the mold of a GS rather than GOOG

I think the stock will jump up to $50 pretty quickly (1 yr), however at this point growth will slow as BX market cap at that point would be nearly 100B

By: Chris

Chris — Mon, 05 Nov 2007 01:56:52 +0000

Eyal,
I don’t disagree about the $21 area. However, this is just an accumulation on my part. Financial is a tough area to invest right now!

By: Eyal

Eyal — Sun, 04 Nov 2007 20:26:27 +0000

Chris,

I don’t think it’s a buy here. The financial are still under water and the sellers are still out there. I’m not touching financial right now – I think that a good buy for bx is the 21 level. But you are right – it’s a good company – and it will be x times bigger in the coming years.

By: Chris

Chris — Wed, 31 Oct 2007 14:39:30 +0000

Abhi,
I only use one source I trust: Vickers Research.
The previous reporting period is the last quarter they reported institutional numbers. I can’t give too many details as the information is paid for and owned by Vickers.

You can use MSN but always stay with the same source because these numbers are always different; everywhere you look.

Vivkers has been consistent since I have been using them for the past 4-5 years.

By: Abhi

Abhi — Wed, 31 Oct 2007 14:07:47 +0000

Chris,

Another very interesting article. I have a couple of questions though, what is the ‘previous’ period that you refer in the ownership data that you have presented. In other words, when you say Shares held previously:6.3 Million, when was this?

I don’t have access to current ownership data and I am assuming your figures are the most current. On MSN money, I can see data till 6/30/07 and it seems at that time ownership was about 15%. How does this fit in with your argument that institutional ownership is increasing?

Thanks in advance for your answers.

cheers