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Blackstone Group (BX) Has Fallen 4% in Last One Year, Underperforms Market

Alex Smith
·4 mins read

If you are looking for the best ideas for your portfolio you may want to consider some of RiverPark Advisors top stock picks. RiverPark Advisors, an investment management firm, is bullish on Blackstone Group Inc (NYSE:BX) stock. In its Q2 2019 investor letter – you can download a copy here – the firm discussed its investment thesis on Blackstone Group Inc (NYSE:BX) stock. Blackstone Group Inc (NYSE:BX) is a private equity alternative investment management firm.

In July 2019, RiverPark Advisors had released its Q2 2019 investor letter. The investment firm said that Blackstone Group Inc (NYSE:BX) stock was one of the top contributors to the Large Growth fund's performance in Q2 2019. Blackstone Group Inc (NYSE:BX) stock has posted a return of -3.6% in the trailing one year period, underperforming the S&P 500 Index which returned 8.3% in the same period. This suggests that the investment firm was wrong in its decision. On a year-to-date basis, Blackstone Group Inc (NYSE:BX) stock has fallen by 8.1%.

In Q2 2019 investor letter, RiverPark Advisors said the Large Growth fund posted a return of 7.4% in the second quarter of 2019, outperforming fund's benchmark the S&P 500 Index which returned 4.3% in the same period. Let’s take a look at comments made by RiverPark Advisors about Blackstone Group Inc (NYSE:BX) stock in the Q2 2019 investor letter.

"Blackstone: BX shares were our top contributor for the quarter fueled by a strong market as well as the continued positive shift in sentiment created by the company’s April announcement that it would become a C-corporation on July 1. Blackstone’s conversion from a partnership to a corporation is expected to increase the shareholder demand for BX shares as investors will no longer receive partnership earnings and loss forms (K-1s), and index funds and other institutional investors will now be able to own the shares.

Despite its year-to-date strength (BX shares have generated a 53% return through the first half of 2019), we continue to view BX as one of the best risk-reward holdings in our portfolio given its impressive AUM growth (from $400,000 of AUM in 1985 to $88 billion at its 2007 IPO to $512 billion today), world class fund returns and still below market valuation of approximately 14x our 2020 estimate for distributable earnings, plus a trailing dividend yield of 4.9%. We expect the company’s fundamentals to remain quite strong over the next several years and further expect the company’s new corporate structure to improve its stock liquidity and increase its institutional ownership. We maintained our BX position during the quarter, and it remains a top five position in the Fund."

Private equity vs. venture growth investing
Private equity vs. venture growth investing

In Q2 2020, the number of bullish hedge fund positions on Blackstone Group Inc (NYSE:BX) stock decreased by about 4% from the previous quarter (see the chart here), so a number of other hedge fund managers don't seem to agree with Blackstone's growth potential. Our calculations showed that Blackstone Group Inc (NYSE:BX) isn't ranked among the 30 most popular stocks among hedge funds.

The top 10 stocks among hedge funds returned 185% since the end of 2014 and outperformed the S&P 500 Index ETFs by more than 109 percentage points. We know it sounds unbelievable. You have been dismissing our articles about top hedge fund stocks mostly because you were fed biased information by other media outlets about hedge funds' poor performance. You could have doubled the size of your nest egg by investing in the top hedge fund stocks instead of dumb S&P 500 ETFs. Below you can watch our video about the top 5 hedge fund stocks right now. All of these stocks had positive returns in 2020.

Video: Top 5 Stocks Among Hedge Funds

At Insider Monkey we leave no stone unturned when looking for the next great investment idea. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. We go through lists like the 10 most profitable companies in the world to pick the best large-cap stocks to buy. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. You can subscribe to our free enewsletter below to receive our stories in your inbox:

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