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The Blackstone Group L.P. Message Board

holding38 24 posts  |  Last Activity: Nov 23, 2015 3:15 PM Member since: Jun 22, 2009
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  • The Activist Spotlight
    American Capital (ticker: ACAS) Business: Global private equity and asset management
    Investor’s Avg Cost: $12.87/share Stock Market Value: $3.8 billion ($14.39/share)
    What’s Happening: Elliott Associates is opposing the announced spinoff of certain business-development company assets and is recommending operational, governance, and strategic changes.
    Key Numbers: 8.4%: Elliott’s stake of ACAS common.
    14.6 years: average tenure of current ACAS directors.
    71%: median price of ACAS stock to net assets, versus 115% for peers.
    $23: share price Elliott estimates if its recommendations are followed.
    Behind the Scenes: Elliott believes that the company’s spinoff plan is being presented to stockholders after years of: 1) ineffective management, 2) poor capital deployment, 3) directors lacking qualifications, 4) compensation that rewards failure, and 5) excessive overhead. In Elliott’s opinion, the spinoff plan only exacerbates the ill effects of these problems by further entrenching an ineffective management team, establishing a subscale investment platform with questionable ability to deliver stockholder returns, and squandering the company’s opportunity to optimize its existing platform. Elliott would like to see a strategic-review committee led by new directors and advised by qualified outside counsel and bankers to explore all of its options.
    If American Capital does not genuinely engage with Elliott in discussions about these issues, Elliott will have no choice but to nominate a full slate of directors to effect any change. Another potential option would be to sell the company or some of its assets to a private-equity firm, which could bring in its own team to
    manage the assets. —KENNETH SQUIRE

    I expected something of a spike in ACAS when this appeared and the contest for ACAS became more open. However, it appears that no discount is large enough to bring in buyers. I would ascribe this to market skepticism regarding management behavior.

  • holding38 holding38 Nov 20, 2015 6:19 PM Flag

    Just sent the email. Thank you.

  • holding38 holding38 Nov 17, 2015 6:11 PM Flag

    Thanks NMB. I would have given you five stars for this post and #5 that follows instead of one measly thumbs up if I could have done so. Your answer also highlights what is for me the only problematic part of the Elliot proposal: stopping the split. As a retiree I've been looking forward for some 500 years to the reintroduction of the dividend. Can a company that specializes in reorganizing other companies really have so much difficulty rationalizing itself?

  • Reply to

    Bought more shares today at $7.98 (1)

    by holding38 Nov 12, 2015 11:58 AM
    holding38 holding38 Nov 12, 2015 4:42 PM Flag

    The quality of corporate loans is indeed an issue, but it is not overwhelming. IBN has a strong balance sheet, corporate loans should improve as the economy picks up and consumer loans are doing well. I believe the loan issue is more-than-compensated-for by the current share price. According to Morgan Stanley:

    Asset quality was broadly in line: Bad loan formation (excluding slippages from restructured loans) was lower QoQ at Rs14bn (0.4% of loans, non- annualized ) vs. Rs33bn (1.0%) last quarter. The negative, however, was higher slippages from restructured loans (Rs9.3bn vs. Rs2.9bn). The bank also refinanced loans amounting Rs20bn this quarter vs Rs10bn last quarter. Impaired loans ratio (including SRs but excluding refinancing) was lower at 6.9% vs. 7.1% last quarter. Credit costs also moved lower to 93bps vs. 97bps last quarter.

  • In its Nov. 2 report, Morgan Stanley reiterated its overweight rating and raised its price target from 315 to 325 rupees ($10.21). The fiscal year ends in March. Here are the MS estimates:

    3/15 3/16e 3/17e 3/18e

    EPS (Rs) 19.3 20.2 23.2 27.7

    PE 16.3 13.7 12.0 10.0
    P/BV 2.3 1.8 1.6 1.4

    Since 1 ADR = 2 Indian shares and the recent (11/10) exchange rate is $1 = 63.67 rupees, the four years of earnings work out to $0.606, $0.6345, $0.7256, and $0.87. So the price is a little more than 9 times 2017 earnings (in the 3/18 year), just 2 years from now. With the private bank sector in India viewed favorably by the major Wall Street banks, a falling interest rate environment in India, and India in the process of passing China in economic growth rate, ICICI Bank, which is well managed and the largest private bank in India, is a compelling value.

    Sentiment: Strong Buy

  • This is what Bloomberg had to say about Sept. quarter earnings:

    ICICI Bank Ltd.’s second-quarter profit rose 12 percent to a record as India’s largest private sector lender by assets extended more loans.
    Net income climbed to a record 30.3 billion rupees ($470 million) for the three months ended Sept. 30, from 27.1 billion rupees a year earlier, the Mumbai-based lender said in an exchange filing Friday. That was in line with the 30 billion-rupee mean of 30 analyst estimates compiled by Bloomberg. The lender will also sell a stake in its insurance unit.
    Domestic retail loans at the lender grew by 25 percent, countering slower growth in corporate lending, a statement from the bank showed. A slower-than-expected economic revival and high borrowing costs are hindering Chief Executive Officer Chanda Kochhar’s efforts to boost the bank’s profit at a quicker pace.
    “Retail loans are driving credit growth at the bank,” Karthikeyan P, a Chennai-based banking analyst at Cholamandalam Securities Ltd., said by phone. “Curtailing bad debt on a secular basis will help the bank to grow profits at a faster pace.”
    ICICI’s gross nonperforming loans climbed nine basis points to 3.77 percent of total advances from June, the filing showed. While the ratio is the highest among the nation’s five largest private-sector banks, Kochhar said on a media call that bad-loan formation at the lender for the year to March 31 will be lower than the previous year.

  • Reply to

    Coming Friday 10% rally

    by fred_woodstone Oct 27, 2015 12:03 PM
    holding38 holding38 Oct 28, 2015 5:42 PM Flag

    HDFC Bank (HDB) recently reported weak earnings growth despite strong revenue growth. This has probably affected IBN which may have to cut its lending rates to remain competitive. Even so, HDB sells at much higher PE and price to book ratios. IBN will report earnings in the next few days and that will have a major impact on near-term price changes. Longer term, strong growth is clearly in store, and given the current low PE, current prices represent an attractive entry point.

    Sentiment: Strong Buy

  • Reply to

    Investors were burnt

    by as0nwecc Oct 28, 2015 9:39 AM
    holding38 holding38 Oct 28, 2015 5:26 PM Flag

    Book value is the core basis for mortgage reit earnings. As long as a secondary is sold at a price higher than book value, the earnings capacity of existing shareholders rises; that is, they benefit. As for the buyers of a secondary offering, the risk is like any other stock purchase, shares may decline in price. The mortgage reit group has been doing badly (look at AGNC and MTGE, for example). Since ETFs hold many reit shares, worsening investor sentiment affects all companies in the group, no matter how well they are doing. I am impressed by the fact that 3 top insiders all made huge purchases at the last secondary price.

    If more attractive mortgage securities become available and the share price remains higher than the book value, I would expect additional secondaries; they too will be accretive to EPS. Since BX is the world's largest real estate holder (to the best of my knowledge) and a savvy deal-maker, I would expect a long term of rising earnings and dividends for BXMT. Share prices will fluctuate with market sentiment, but the long term direction will be upward.

    Sentiment: Strong Buy

  • holding38 by holding38 Oct 27, 2015 6:01 PM Flag

    9 analysts had Q3 earnings ranging from 60 to 71 cents; average estimate was 65 cents. Just came in at 72 cents. Nice.

    New dividend--already reported and paid for Q3--is 62 cents per quarter.

    Sentiment: Strong Buy

  • Reply to

    what are the long term prospects of icici ?

    by chethanshetty Oct 2, 2015 4:37 PM
    holding38 holding38 Oct 8, 2015 7:17 PM Flag

    Thank you Blue for your serious discussion. It would be really helpful if this board could escape the domination by pumpers and bashers. Your contribution here is much appreciated.

    Sentiment: Strong Buy

  • Reply to

    New Yahoo ID ..

    by its_not_my_business_but Oct 6, 2015 11:39 AM
    holding38 holding38 Oct 7, 2015 2:23 PM Flag

    Hi NMB. Change is usually unsettling. It would be a disaster if you were to leave this board since all of us learn so much from your posts. It's a relief to know you are still here--and kind enough to keep your initials. Thank you so much for staying--and please keep posting!

  • holding38 holding38 Oct 5, 2015 5:03 PM Flag

    Sorry Done. I tried to give you a thumbs up on my iPad. My finger evidently hit the wrong direction.

  • I started investigating and then accumulating BXMT after seeing the strength of insider buying. On April 17, Stephen Plavin. Pres. and CEO, bought 24,590 shares, Michael Nash Executive Chair of the Board of Directors bought 65,574 shares, and John Schreiber, Director, bought 100,000 shares, spending $750K, $2 million and $3 million respectively. They all paid the public price of $30.50 when BXMT sold 23 million shares to help cover the cost of the GE properties' acquisition. Blackstone is easily the best of the private equity firms and the world's largest real estate holder. BXMT has the inside position to continue acquiring commercial mortgage assets tied to Blackstone deals. The mortgages are typically 3-5 years and floating rate, so the firm's income will rise as interest rates do. At today's close of 28.44, the yield is 8.72%, making the shares a steal. I would note that Yahoo has the numbers wrong again--they show the old dividend rate and a yield of 7.45%.

    Sentiment: Strong Buy

  • Just added at $9.39. Had to sell other things,but this was a no-brainer. Ultimately ICICI Bank is a macro play on the future of India. Like stocks in other emerging markets, IBN is extremely volatile. The stocks rally big-time when foreign money moves in and go in reverse when it moves out. Right now emerging markets--including India--are out of favor. That creates opportunity. IBN is the biggest private bank in India, with interests in insurance, mutual funds, wealth management and private equity. The state-owned banks are deeply troubled, but the private ones are in good shape. The consensus earnings estimates for this year (ends 3/16) are $0.69 and for next year (3/17) $.082. The PE is thus 11.45 based on next year's earnings. The average price target is 12.11.

  • Reply to

    Phil Harper.....

    by blankwillie Jul 23, 2015 8:29 AM
    holding38 holding38 Jul 27, 2015 2:54 PM Flag

    Could he be selling to fund the exercise an equal or larger amount of options?

    Sentiment: Hold

  • Reply to

    What happened to share price today?

    by jag7878 Jul 14, 2015 10:54 AM
    holding38 holding38 Jul 14, 2015 4:27 PM Flag

    The shares are trading ex-dividend today. There has been a 10% stock dividend; one new share for every 10 held. The new shares will show up in accounts on July 17. Go to the company's web page and click on Investor Relations.

    Good luck to all holders.

  • Reply to

    good report.

    by sam_0534 Jun 16, 2015 12:14 PM
    holding38 holding38 Jun 16, 2015 4:56 PM Flag

    Thank you Sam. Just added a few days ago at $41.10. Started buying two years ago at $20.77, but the shares are still cheap. Yahoo's five-year projection of negative earnings growth doesn't make sense. The distributions will be lumpy, but the strong growth in assets under management looks set to continue, especially given the tendency of institutional investors to make their investments more concentrated. This will help Blackstone since no large alternative asset manager can match Blackstone for performance record.

    Sentiment: Strong Buy

  • holding38 holding38 Jun 2, 2015 1:41 PM Flag

    That's nuff Lucy, you're missing the point. Dilution occurs when a fixed net asset value or net income is divided among a larger number of shares. BXMT is increasing its net asset value and net income with the acquisition of additional assets. Book value and EPS may actually increase. Given the insider buying in the company, it appears that insiders expect that to happen (or BXMT would not have purchased the additional assets and sold the new shares). I expect that to happen; initiated a position today.

    Sentiment: Buy

  • Reply to

    Mirion Sold @ $320 million

    by sandy.criscione Mar 26, 2015 7:01 AM
    holding38 holding38 Mar 26, 2015 4:43 PM Flag


    I'm not sure about this, but if I recall correctly, when ACEIII was set up, the outside investors who put in the needed cash did not want it included at the outset but did want a purchase option included. If I am correct, including that option was necessary to seal the deal on ACEIII.

    Sentiment: Buy

  • Reply to

    Blackrock 8.4% Filing

    by sandy.criscione Jan 23, 2015 3:59 PM
    holding38 holding38 Jan 23, 2015 6:14 PM Flag

    Blackrock has many exchange-traded and index funds. When people buy these funds, Blackrock buys the underlying stocks and is listed as the owner. This does not indicate an active decision on the part of Blackrock to accumulate ACAS.

    Sentiment: Buy

31.08+0.41(+1.34%)Nov 25 4:02 PMEST