Summary: ON SALE
Score: 11/20
MOS: 66%
Share Price: $53
Sticker Price: $160
Is Blackstone a good buy?
Blackstone is a private equity and alternative investment firm based out of New York. The company was founded in 1985 and today they have about 2,300 employees.
To quickly summarize…
A private equity firm invests in or completely buys out private businesses with the intention of increasing revenues and profits and essentially earning a large return on investment.
An alternative investment firm is also known as a hedge fund. A hedge fund is similar to a wealth management firm in that they deploy your money to generate returns. The difference is hedge funds avoid many of the regulations and requirements within the securities act of 1933. In exchange, hedge funds require their customers to be accredited. Accredited means you have a $1M net work or have earned over $200K ($300K for married couples) the last two years. Overall, an accredited investor has the opportunity to invest in and profit from the investments made on the private equity side of the business. These are investments that a typical wealth management firm cannot participate in.
Some of the largest investments Blackstone has made include Hilton, Merlin Entertainment, Performance Food Group, and Freescale Semiconductor.
As of the morning of 8/5/2020, Blackstone announced they reached a deal to buy 75% ownership in Ancestry.com for $4.7B. Ancestry has about 3 million customers paying between $25 and $50 per month. When you run the math, that’s between $75M and $150M of revenue per month. Very impressive.
Membership platforms, similar to SaaS platforms, are recurring revenue business models. This investment could be a big win for not only Blackstone but also it’s investors.
With a score of 11/20, the overall financials are looking pretty good. With a share price of $53 vs a sticker price of $160, this stock has some upside potential.
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