NEW YORK (TheStreet) - Blackstone Group LP (BX) plans to launch a hedge fund that will make major bets, an effort it hopes will eventually rival some of the largest firms in the business, sources say, the Wall Street Journal reports.
The private equity firm will fund several teams of traders with hundreds of millions of dollars to place a relatively small number of large, highly concentrated wagers, sources said.
The strategy is notable now as many hedge funds are shying away from making such outsize bets, the Journal added.
Combined, the teams' investments will form a multi-strategy hedge fund to be pitched to wealthy clients. The firm is confident the firm can hedge the overall risks, sources add.
The firm's shares closed higher to $33.46 on Friday.
TheStreet Ratings team rates BLACKSTONE GROUP LP as a Buy with a ratings score of B+. TheStreet Ratings Team has this to say about their recommendation:
"We rate BLACKSTONE GROUP LP (BX) a BUY. This is driven by a few notable strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its robust revenue growth, notable return on equity, solid stock price performance, impressive record of earnings per share growth and compelling growth in net income. We feel these strengths outweigh the fact that the company shows weak operating cash flow."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth came in higher than the industry average of 5.2%. Since the same quarter one year prior, revenues rose by 22.5%. Growth in the company's revenue appears to have helped boost the earnings per share.
- 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, BLACKSTONE GROUP LP's return on equity exceeds that of both the industry average and the S&P 500.
- Powered by its strong earnings growth of 51.72% and other important driving factors, this stock has surged by 61.93% over the past year, outperforming the rise in the S&P 500 Index during the same period. Turning to the future, naturally, any stock can fall in a major bear market. However, in almost any other environment, the stock should continue to move higher despite the fact that it has already enjoyed nice gains in the past year.
- BLACKSTONE 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. During the past fiscal year, BLACKSTONE GROUP LP increased its bottom line by earning $1.98 versus $0.40 in the prior year. This year, the market expects an improvement in earnings ($3.15 versus $1.98).
- 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 58.4% when compared to the same quarter one year prior, rising from $167.64 million to $265.62 million.
- You can view the full analysis from the report here: BX Ratings Report