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Fortress Investment Group LLC Message Board

  • deanmortensen deanmortensen Mar 14, 2014 3:32 PM Flag

    S&P Capital IQ states the "fair value" of FIG shares is $12

    That $12 valuation seems reasonable to me. The 4Q earnings release states FIG has cash and investments per share of $3.26. The per share value of performance incentive fees earned but not paid is $1.74. Adding those two figures totals $5. The business generated 79 cents of GAAP net income per Class A share last year, and 88 cents of pre-tax distributable earnings (per share). As of year-end 2013, FIG had no balance sheet debt.

    I agree with the S&P IQ stock analyst that FIG stock is way undervalued. On the 4Q conference call, Wes Edens said Fortress was looking at "harvesting" some of the private equity investments that Fortress made in the 2006-7 period. I'm guessing that could be the catalyst for stock price appreciation in 2014 as gains are realized on some of those 2006-7 vintage investments.

    Sentiment: Strong Buy

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    • Q1 2013 Earnings $100M / .20 on 496M shares
      Q1 2014 lowered Estimate $73M / .17 on 430M shares

      FED QE3 gone by EOY, possible 10% correction lowering FIG to 6
      China slowing
      Japan question mark
      Europe question mark
      Latin America opportunities?

      FIG will have a more difficult time generating returns in 2014.
      Will FIG prove its $12 perceived valuation in 2014 to the market?
      Neutral, will rebuy at a lower price point.

    • S&P Capital IQ is far away behind me because I told my friends last year that my target price on FIG is about $12. Once the consolidation is done and the general is stable, FIG will go up definitely. The last piece of bad news of secondary offering is already out, what else does the bear expect? I picked up another 500 shares to add up my total position to be 20000 shares. I might hold onto 1 for another year or two or more .....

      Good luck longs!

    • I 100% agree with you. I also feel that the last go around they did with Nomura was FIG "harvested" their own shares. They bought back 60million of their own shares @ $6 and then resold half at $8. Let's not take into account that some of the principals partially cashed out. That is inevitable and part of how they get paid.

      So, they bought back 60million, at $6, sold about 1/2 about at $8.15 had a net reduction in shares and picked up $60million cash for their troubles. What's wrong with this picture and why are so many people crying?

      I still think they are morphing themselves into an investment bank.

      If later this year, they can "harvest" 100million more of their own shares and pull the same kink of deal ala Nomura, you won't find me crying about it then either.

      Bob S.

4.85-0.03(-0.61%)Jul 27 4:02 PMEDT