Said Oppenheimer: "We are upgrading our rating...based on our positive secular outlook for the private equity based asset managers in general, and our view that given Carlyle's broadly diversified array of carry funds, it is better positioned than most peers for what may be choppier markets in 2014."
"Recall that until recently (1/15/2014), our favorite name in the group was APO which has two large funds that focused on distressed investments that did exceedingly well in the economic rebound. By comparison, CG's investments are more diversified by fund, sector and geography," it concluded.
TheStreet Ratings team rates CARLYLE GROUP LP as a Sell with a ratings score of E+. TheStreet Ratings Team has this to say about their recommendation:
"We rate CARLYLE GROUP LP (CG) a SELL. This is based on a variety of negative investment measures, which should drive this stock to significantly underperform the majority of stocks that we rate. The area that we feel has been the company's primary weakness has been its poor profit margins."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- 45.14% is the gross profit margin for CARLYLE GROUP LP which we consider to be strong. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, CG's net profit margin of 4.35% significantly trails the industry average.
- Net operating cash flow has significantly increased by 1931.38% to $437.70 million when compared to the same quarter last year. In addition, CARLYLE GROUP LP has also vastly surpassed the industry average cash flow growth rate of 119.00%.
- The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Capital Markets industry and the overall market, CARLYLE GROUP LP's return on equity exceeds that of both the industry average and 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. Regardless of the rise in share value over the previous year, we feel that the risks involved in investing in this stock do not compensate for any future upside potential.
- 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 year. 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 ($3.14 versus $1.80).
- You can view the full analysis from the report here: CG Ratings Report