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Why Brookfield Property Partners (BPY) Stock is a Compelling Investment Case

Alex Smith
·4 mins read

Horos Asset Management recently released its Q2 2020 Investor Letter, a copy of which you can download here. The investment firms portfolios have not been immune to this recovery, with Horos Value Internacional posting a 16.0% return in the second quarter in line with the 16.5% rise of its benchmark index, and Horos Value Iberia returning 14.1%, above the 8.5% of its benchmark index. You should check out Horos Asset Management's top 5 stock picks for investors to buy right now, which could be the biggest winners of the stock market crash.

In the said letter, Horos Asset Management highlighted a few stocks and Brookfield Property Partners L.P. (NASDAQ:BPY) is one of them. Brookfield Property Partners L.P. (NASDAQ:BPY) is a global commercial real estate company and subsidiary of alternative asset management company Brookfield Asset Management. Year-to-date, Brookfield Property Partners L.P. (NASDAQ:BPY) stock lost 40.0% and on September 11th it had a closing price of $10.48. Here is what Horos Asset Management said:

"The Canadian company Brookfield Property Partners ("BPY") is one of the largest real estate asset managers in the world. It owns, operates and develops a large portfolio of office, retail, multi-family, industrial, hospitality and student housing properties, among others. The company has seen a significant stock price decline this year of about 65%, caused—as it cannot be otherwise—by the great impact of the coronavirus pandemic on the occupation and use of its assets. To this we must add the market's structural fear regarding BPY's high exposure to shopping centres, where bankruptcies and closures have occurred in recent years due to changes in the population's consumption patterns given the rise of e-commerce.

Despite this, we think that BPY provides an interesting window of opportunity to invest at this time. The reasons? On the one hand, the company's portfolio of shopping centres is of high quality and has been acquired at very attractive prices (see, for example, the acquisition of General Growth Properties). On the other hand, BPY is controlled—51% of the capital—by Brookfield Asset Management, one of the world's largest alternative asset managers and possibly one of the best teams allocating the capital of its companies. In the case of BPY, this translates into value-creating acquisitions, high dividend payments and share buybacks with a high discount on Net Asset Value (NAV). As an example of this, on July 2 BPY announced the offer to buy back its own shares for about 8% of the company's capital.

In short, investing in BPY means buying a global and diversified portfolio of assets with a high discount on its NAV (of 70% at the stock price lows) and partnering with outstanding capital allocators, who will take the necessary measures to reduce this discount and unlock the real value of these assets."

Pixabay/ Public Domain

Our calculations showed that Brookfield Property Partners L.P. (NASDAQ:BPY) 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. For example, this “mom” trader turned $2000 into $2 million within 2 years. So, we are checking out her best trade idea of the month. 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.