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Brookfield Asset Management (BAM): Strong Growth And Abundant Potential

Alphyn Capital recently released its Q1 2020 Investor Letter, a copy of which you can download below. The fund posted a return of -21.7% for the quarter, underperforming its benchmark, the S&P 500 Index which returned -19.6% in the same quarter. You should check out Alphyn Capital’s top 5 stock picks for investors to buy right now, which could be the biggest winners of the stock market crash.

In the said letter, Alphyn Capital highlighted a few stocks and Brookfield Asset Management Inc (NYSE:BAM) is one of them. BAM is an alternative asset management company. Year-to-date, BAM stock lost 16.4% and on May 12th it had a closing price of $32.50. Its market cap is of $51.03 billion. Here is what Alphyn Capital said:

“Brookfield Asset Management owns prime real estate, critical infrastructure, and renewable assets globally. It is extremely well positioned to benefit from the approx. $25 trillion allocation to alternative assets globally over the next decade. Its scale, extensive global network of local operating teams, and access to large institutional capital makes it one of the few organizations around the world with the resources and operating skill to find and purchase attractive infrastructure assets, often at prices lower than replacement value. While the company’s real estate assets in particular are undoubtedly under some pressure right now, the portfolio is “funded almost exclusively with assetlevel, non-recourse financing with an average term to maturity of more than 5 years and virtually no financial covenants” 5 and the parent company not only has extensive access to $12bn in bank lines and $5bn in non-core assets that could be liquidated in a crunch, but also has approximately $30bn of uninvested capital from its latest fundraising to put to work.6 Finally the company should benefit from its 62% ownership of Oaktree Capital, one of the premiere distressed debt shops, that has historically thrived during periods of credit dislocation.”

In Q4 2019, the number of bullish hedge fund positions on BAM stock increased by about 6% from the previous quarter (see the chart here), so a number of other hedge fund managers seem to agree with BAM’s upside potential.

Disclosure: None. This article is originally published at Insider Monkey.

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