The Blackstone Group L.P. (BX)

IcarusEquity (21.22) Submitted: 11/09/07 8:20 PM : Start Price: $22.55 BX Score: -24.64

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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