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Will Carlyle Group (CG) Stock Benefit From Minority Investment In China's Ganji.com?

Stocks in this article: CG

NEW YORK (TheStreet) -- The Carlyle Group LP  (CG) made a minority investment in Ganji.com, an operator of online and mobile-based classifieds in China.

Equity for the transaction came from Carlyle Asia Partners IV. Further details of the transaction were not disclosed.

As of March 31, Carlyle has invested $5.2 billion in about 80 transactions in China.

Must Read: Warren Buffett’s 25 Favorite Stocks

 
 
Shares of Carlyle Group are slightly lower this afternoon.
 

TheStreet Ratings team rates CARLYLE GROUP LP as a Sell with a ratings score of D+. TheStreet Ratings Team has this to say about their recommendation:

"We rate CARLYLE GROUP LP (CG) a SELL. This is driven by multiple weaknesses, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. Among the areas we feel are negative, one of the most important has been an overall disappointing return on equity."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. Compared to other companies in the Capital Markets industry and the overall market on the basis of return on equity, CARLYLE GROUP LP underperformed against that of the industry average and is significantly less than that of the S&P 500.
  • Compared to where it was a year ago today, the stock is now trading at a higher level, and has traded in line with the S&P 500. Turning our attention to the future direction of the stock, we do not believe this stock offers ample reward opportunity to compensate for the risks, despite the fact that it rose over the past year.
  • CARLYLE GROUP LP reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, CARLYLE GROUP LP increased its bottom line by earning $1.80 versus $0.31 in the prior year. This year, the market expects an improvement in earnings ($2.92 versus $1.80).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Capital Markets industry. The net income increased by 690.9% when compared to the same quarter one year prior, rising from -$3.30 million to $19.50 million.
  • You can view the full analysis from the report here: CG Ratings Report

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