Alexander MacDonaldBrookfield CorpBN.TOBUYOct 30, 2023

Thinks it will be largest company on TSX in a few years. Mind-boggling amount of growth to come. Amount of money moving to alternatives is gigantic. 50% of asset base collects fees, and that base is increasing. Benefits from big themes like decarbonization and digital economy. Global. Cheap valuation. Lagging US peers due to worries over its 35% portfolio allocation to bad real estate, but most is running strong. Yield is 0.8%.

BN owns a percentage of BAM. BN is trading at a discount to NAV, widest discount in a long time, which is why you want to look at buying it here. Working at home has hurt BN's commercial properties. BN has raised lots of capital, great company, well run. BAM and BN are two of the best businesses you can own.

Core holding. Real estate has been an overhang. Company would argue that its holdings are high quality in good locations. Despite rise in interest rates, demand for alternative assets hasn't declined. Successful fundraising. Benefits from rates going lower. Excellent long-term hold for a growth company.

Many levers to pull to capitalize on value. Strong platform for growth.

Other private equity players have performed better. Hurt by real estate overhang. Valuation less than 11x distributable cashflow. Will always trade at a bit of a discount to sum of the parts, as it's the holding company. Free cashflow yield is north of 7%, exceptional value. Really good management. Good compounder at attractive price. He'd continue to buy.

It is a unique company and is expecting annualized growth in the 15 to 20% range. It can be somewhat volatile so buy on the dips. Its biggest asset is BAM which has $420 billion under management and is aiming for $1 trillion over the next five years and in fact is ahead of schedule in this effort. It is a good long term hold and still has room to run.

One of the world's foremost managers of long-duration assets, like private equity, renewable energy and utilities. They have assets around the world like the UK. They have size, scale and diverse funding. Are also a fine asset manager. Are capital-lite. Flows of funds into alternative assets are outstripping funds into stocks and bonds, even with these interest rates. Their shareholder returns are 15% compounded over the last 25 years. That means a $1 in 1998 is $31 today, including dividends.

Unfortunately, Brookfield is looking like the old Brascan empire, a plate of spaghetti, where they spin off all these entities, then buy them back and it's hard to keep track of how many there are. That said, BAM and BN-T are grossly undervalued. The market is overreacting to the impact of commercial real estate BN-T, in particular. 

He hasn't warmed up to the Brookfield companies. This restructuring is a bit of a shell game. He prefers a pure play stock. But if he prefers the Renewables stock the most given its growth prospects.

Stock overhang due to commercial real estate portfolio. Still thinks overall - real estate will be strong. Interest rates will put pressure on company in mid term. Long term is a strong business. Excellent ability to raise money. Will continue to own shares. 

He's very negative and expects 17% downside. No, negative trend yet, but doesn't like the Brookfield companies. Why are there three Brookfield companies in the index? $40.85 is his target.

It has good assets and good access to capital. This means it can buy assets with declining prices and there are global opportunities as well. It is at a good entry point to buy for the long term.

Two really well-run companies. 

BN is the parent company for all the subsidiaries. A wonderful compounder. Negative sentiment around real estate holdings, which are high quality and global. Capital allocation opportunities will benefit shareholders. Loves it, he'd buy right here.

For BIP.UN, a wonderful income opportunity. You get growth and income. He'd be a buyer of this one, too. Valuation discount to BN. 

What's hurt it is their large commercial property portfolio, though an excellent AAA one. BN trading at a 30% discount to NAV. Now is a good time to look at BN at these levels. Historically, they've narrowed the NAV over time.