The Blackstone Group L.P. (NYSE:BX)

Blackstone Group: The Dead Shall Rise

The recent decline in BX price (IPO $31) is a reflection of worry that investor worry, lack of liquidity, riskier leveraged assets, speculation regarding hidden losses in hedge fund business, and a possible increase in its tax rate. First, don't fight the Federal Reserve. Second, any tax rate hike is pure "speculation", nothing moves fast in Congress, and lobbyists have them in their pockets. Third, Blackstone's existing portfolio is up nearly 40% (double the pace of the overall S&P performance). Fourth, it has approximately $21billion in reserves to take advantage of new opportunities, during the recent fire sale. Last, BX has the smartest minds on its team?it's the Goldman Sachs of hedge funds.

Sales: $2.78B
Income: $3.46B
Next Years PE: 14.8
Sales Growth: +125.50%
Income Growth: +245.60%
Net Profit Margin: 124.67%
Debt/Equity Ratio: 0.04

If you want additional reason to buy, according to Blackstone, the company will pay quarterly distributions?a minimum of $1.20 per share or 5% yield?beginning in the fourth quarter of 2007 through the end of 2009 (See: http://ir.blackstone.com. Smith Barney notes it will be 6.6%. Let's face it, this stock has had the crap kicked out of it, but if the above argument holds, Blackstone has loads of upside potential.

This stock is way way over valued... and everyone knows it!

I am purely going to ride this one up for the next 30 days b/c the KKR IPO hype will continue to drive the price on this one up further, and then I will sell (in the CAPS way). I considered putting real money on this short-term play, but I got burned on that during the dot.com era, so I won't be risking real capital... just CAPS points.

I Owe! I Owe! It's straight down the toilet I go!

If a Bonesman is running this company, then you know all their money is going to disappear without a trace.

I hear Bonesmen also like to rob graves! I guess G.W. Bush's grandfather "Pescott Bu sh" was an excellent grave robber and even stole Geronimo's skull !!!!! The Sick S.O.B.!!!!!

These are the kind of people we elect to run our country!

Hell Yeah....Stealing from the DEAD is like taking candy from babies....kind of like the stockmarket.

M&A to pick up in 2011.... BX, GS, KKR, and the rest of the usual suspects will be putting up monster years. Buy all of them heavy, but wait for the dips. don't chase, you'll have time to catch them on down days. BX and KKR are cheap right now.

Steve Schwazman (sp?) - member of skull & bones. Spent how many millions on his birthday? Management seems wasteful of resources. '

Even though he made like $1 mil a day last year, how much of that should have went to building value for shareholders? Buffett takes a $100K salary, do I need to really say more?

I think $1.22 B could still be a generous valuation for this company, it still has room to drop. I am speculating and have not done much research.

I'm sure that I have shorted Blackstone here in the past, but at today's prices the company is too cheap to ignore. It's assets under management have doubled since it's IPO, yet it's stock price has imploded. Its GAAP financials hide the business's profitability. With a solid franchise, huge dividend, and net cash on it's balance sheet, BX is a good bet to outperform the S&P going forward.

Deej

The boys at Blackstone know exactly what they are doing, they are diversified and buying up the debt, I can't believe that they are getting such bad press, they act with confidence and people look at them like they are arrogant idiots, Buffett does it and every Jack and Jill starts buying railroad stocks, just because well you know what someone needs to stand up for those boys at Blackstone, and I'm willing to do it they know what they are doing they didn't go from 400k Dollars in startup cash to a 5 Billion Dollar company in 20 Years on acting stupid. They buy with the blood on the streets and I dig it, and you know what listening to Ken Whitney speak sounds like they enjoy doing it. Blackstone is the real deal and is way undervalued. They hire top level talent and put out top level performance.

Blackstone has turned incredible profits and I think they'll continue to do so.

At the current price of $16.57 and a minimum annual dividend of $1.20, BX will be paying a approximately 7% dividend.

BX is sitting on a ton of cash, and is intelligently breaking the deals on all the crap deals that they got in on.

America is on sale, and their in bed with Beijing. This business is all about about the deal flow and capital to make the deals happen.

BX is trading near to it's 52-week lows. Not a bad pick here to ride to $30 or so.

With the current stock market volatility, the Blackstone Group would do extremely well by next quarter and for the rest of the year. It's a stockpicker's market right now, and BX is one of the best out there for this type of game....highly-leveraged private equity=high returns in this recession-worried environment.

Analysts are wrong more often than not, yet investors are still willing to follow their advice. This stock is overpriced @ $29. Nothing has changed in the past several weeks with this company, yet the same people who were avoiding BX @ $22/unit are now crawling all over each other to buy @ $28+. Institutional investors and short term speculators bought in the low $20's and are riding up on their gains. Look for these investors to pull the plug in the next several days and watch as the stock drops back to $24-25. Smart money is already shorting this stock - just look at the volume - 3X the average daily volume for the past 7+ weeks - sure sign of volume shorting. If you have made money on this stock up till now, take your profits and run.

The CEO just sold all of his stock.

The sky is falling, the street's are running red, and investors are heading for the exits into fixed securities.

M&A deals are drying up, and so isn't the money these firms financed to make the deals happen.

With all this being said, why would anyone in their right mind purchase shares of Blackstone? If they can't borrow money, how will they generate their deals...How will the buyouts happen?

Don't throw the baby out with the bathwater. While the big dollar buyouts were occurring, BX was saving their money for the implosion. They have plenty of cash on hand with low debt/equity. If they want to buy a company out, they still have the leverage to do so. My goodness, they closed the huge Hilton deal - that's a positive sign (although they are walking away from the Sallie Mae bid).

BX has enough cash to keep their LBO bids afloat:
Cash per share : 5.509
Debt/Equity: .039

They recently bought a stake in MTAR, an Indian NUCLEAR and aviation engineering firm. They are seeking the high growth companies in India and China. Why invest at home, when the real money is in the Euro and Yen? Blackstone's management knows how to get the job done. They even just raised management fees, as a shareholder I'm smiling.

With a P/E of 1.83...
PEG of .87...
Rev/Share of 9.386
Rev. Growth: 200% yoy
EPS Growth: 245.6%

I'm buying on the dip, and will hopefully see you at $30 a share.

The White House will veto the management tax legislation. They don't need more downward pressure on the finance industry at this point.

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My process, for those interested:
I use www.random.org number generator to produce a number between 1 and 7,801. There are 7,801 stocks available to choose on the Motley Fool CAPS Game. Once I get a number, I go to the list, find that stock, and select that stock to outperform for the next five years.

Subprime crisis had not fully blown up. Company like BX should be in a good position to take up good assets cheaply. On the other hand, it may be squeezed with credit crunch. Between opportunty and threat, I'll bet opportunity on BX's side.

well am in with the hype lol

Cherry picking the low hanging fruit for months now. Big gainer in the long run.

Private equity firms paying pennies on the dollar will profit greatly from the fire sales af risky assets. If 50% of all subprime loans go bad, and someone is buying a portfolio at 25 cents on the dollar... isn't that person doubling their investment?