Editor's Note: Our Financials analyst Jonathan Casteleyn will send subscribers a full report outlining our high-conviction thesis. In the meantime, below is a brief summary written by Hedgeye CEO Keith McCullough earlier this morning.
One of our freshest (newest) Institutional Best Ideas (on the short side) is Blackstone (BX). Jonathan Casteleyn is our senior Financials analyst on the name. Here's an excerpt from his recent "Black Book" on BX:
"The most causal factor for shares has started dropping...and quickly...with net accrued performance fees having moved from $4.11 per share in 1Q15 to $2.78 per share currently. We think that leading carry funds in private equity and real estate won't be able to offset these distributed gains fast enough with new realizations and thus this performance balance will continuing dropping along with the stock. For 2017, we forecast that BX will have to distribute up to 66% of its accrued performance balance, 20 points higher than the distribution supporting its dividend in 2016 and about 200 basis points higher than the all-time high in 2015."
Sell Green,
KM