Massif Capital Finds Brookfield Infrastructure Partners (BIP) Overvalued

Massif Capital, an investment management company, recently published its “Massif Real Assets Strategy” second quarter 2022 investor letter. A copy of the same can be downloaded here. In the second quarter the fund returned -14.9% net of fees and the year-to-date return was -3%. Materials exposure of the portfolio posted losses during the quarter. You can view the top 5 holdings of the fund to know its best picks in 2022.

In the letter, Massif Capital discussed its Massif Real Assets Strategy portfolio. The letter mentioned the company Brookfield Infrastructure Partners L.P. (NYSE:BIP). Brookfield Infrastructure Partners L.P. (NYSE:BIP) engages in the business of infrastructure acquisition and management and is based in Hamilton, Bermuda. The stock of Brookfield Infrastructure Partners L.P. (NYSE:BIP) closed at $41.02 per share on August 5, 2022. One-month return of Brookfield Infrastructure Partners L.P. (NYSE:BIP) rose to 7.33% and its shares gained 11.11% of their value over the last 52 weeks. Brookfield Infrastructure Partners L.P. (NYSE:BIP) has a market capitalization of $18.868 billion.

Here is what Massif Real Assets Strategy specifically said about Brookfield Infrastructure Partners L.P. (NYSE:BIP) in its second-quarter investor letter:

“Take, for example Brookfield Infrastructure Partners L.P. (NYSE:BIP). If we evaluate both KIT and BIP based on each firm’s respective FY2021 EPS and dividend, as well as assuming the same 4% discount rate with the same long-term growth rate, we find that KIT is slightly undervalued while BIP is 71% overvalued. Admittedly, some might argue the risk profile of KIT is higher than the risk profile of BIP, but we would disagree, believing any argument about the political risk of KIT vastly overstates the potential impact of political risk on cash flows. One of the challenges with publicly traded infrastructure has always been the premium placed on the earnings or the yield; we have long found infrastructure cash flow stability to be dearly purchased. In KIT, we believe we have found a collection of infrastructure assets that have been mispriced, a rare occurrence in the slow-moving infrastructure world.”

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Our research shows that Brookfield Infrastructure Partners L.P. (NYSE:BIP) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 15 hedge fund portfolios held Brookfield Infrastructure Partners L.P. (NYSE:BIP) at the end of the first quarter and 15 in the previous quarter.

We discussed Brookfield Infrastructure Partners L.P. (NYSE:BIP) in another article and shared the top infrastructure stocks according to Reddit. In addition, please check out our hedge fund investor letters Q2 2022 page for more investor letters from hedge funds and other leading investors.

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