The Blackstone Group (NYSE:BX)
The Blackstone Group Inc (BX) is a world-renowned investment firm with almost $1 trillion worth of assets under its control. While managing investment vehicles focused on private equity, hedge fund solutions, and insurance, the company’s bread and butter is real estate. Recently, Blackstone has been on a real estate investment trust (REIT) shopping spree, splashing billions to add more companies to its portfolio. As a result of this latest acquisition, Blackstone is on the radar of tons of investors, leading to a 75% increase in mentions over the past day. But is Blackstone a good investment? Using HypeIndex’s innovative hyped stock tracking tool we’ve compiled the data so you can weigh the pros and cons to answer that question for yourself.
Is Blackstone a Good Investment - Positives
Blackstone has been having an excellent few months, here are the highlights.
Blackstone has just purchased another REIT, adding PS Business Parks to its portfolio. The deal worth $7.6 billion will add a ton of business parts, industrial assets, and offices to its rapidly growing real estate holdings. This is only the latest in a series of multi-billion REIT purchases and it's unlikely to be the last as Blackstone still has plenty of investor funds to put to work.
Over the past 12 months alone, investors have handed over $83.7 billion to Blackstone. By the end of Q1, only $47.2 billion had been used, meaning it’s got plenty of free cash to continue buying up real estate across a range of sectors.
Despite somehow managing to slip under the radar of most investors, Blackstone is the single largest asset manager in the world, with a ridiculous $881 billion worth of assets under its control.
For the most part, Blackstone caters solely to those with Scrooge McDuck money, think pension & sovereign funds. However, its latest project will open up investment opportunities to multi-millionaires in an effort to boost the asset manager to the elusive $1 trillion mark.
Blackstone has been making an effort to get into the student housing market, purchasing a majority stake in 8 student-housing properties for $784 million. Despite a 6.6% decrease in undergraduate enrollment, 94% of student rooms were leased prior to the start of the academic year, up 5.5% year on year.
Is Blackstone a Good Investment - Negatives
Despite boasting an incredibly impressive real-estate portfolio, Blackstone isn’t perfect. Here are a few reasons you might want to steer clear of the asset manager.
Small investors (sub 6 figures) can feel somewhat neglected by an asset manager of Blackstone’s size. It’s near-impossible to work out where your money is going when you’re looking at a portfolio worth almost $1 trillion. Ultimately, most people’s investments will only equate to a trickle in Blackstone’s pond, so don’t expect a whole lot of thanks for your investment.
While Blackstone has been snagging up a ton of REITs, it’s been paying a premium to do so. If we look at the figures from its last acquisitions we can see it paid a 24% premium for QTS, 32.1% for WPT, and 39% for Preferred Apartment Communities. While it’s expected that a company will pay a premium for acquisitions, it does mean it’ll take significantly longer to recoup the initial investment.
Hype Asset of the Day - Conclusion
Overall, Blackstone Inc has an incredibly impressive portfolio of assets and only seems to be growing. Because Blackstone has the faith of its investors and tons of free cash, it’s in a position to purchase under-valued REITs left, right, and center, giving it even more room for growth. Once it opens up investments to multimillionaires, it won’t be long before it has $1 trillion worth of assets under its belt, likely leading to a significantly increased stock price. Because of this, Blackrock is recommended as a long-term investment that will slowly grow year on year. If you’re interested in racing more trending stocks direct to your inbox, check out our premium plans. Or if you’d like to learn more about the services offered by HypeIndex, check out our FAQ page.
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