The Blackstone Group L.P. (BX)

TechKing (62.72) Submitted: 10/01/07 3:46 PM : Start Price: $24.83 BX Score: -11.40

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.

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