Sunday, May 17, 2009 9:54:00 AM
http://www.fool.com/investing/value/2009/05/06/where-to-invest-when-the-economy-goes-bam.aspx
Christopher Barker
May 6, 2009
Have you been BIP-tized into the world of BAM?
Brookfield Asset Management (NYSE: BAM) is no cult, but with $24 billion in assets, it is something of an empire. With a focus on property, power, and infrastructure assets, BAM has spawned a couple of targeted spinoffs, in which it retains substantial ownership stakes.
A host of companies
As a former shareholder, I have serious respect for BAM's long-term track record of delivering shareholder value from the assets that form its empire. Although shares have taken a beating since the housing crisis reared its ugly head, the past 20 years of stock appreciation tell a more captivating story. But no matter how well-managed the company may be, it simply couldn't escape a global economic upheaval this severe.
BAM remains profitable despite incredible challenges to several of its core businesses. The company earned $93 million in the first quarter, less than half what it brought in a year earlier, but still solidly in the black. Cash flow fell 38% to $273 million; BAM's specialty funds and investments combined for most of that decline, while income from commercial property rentals and power generation showed some resiliency. BAM's corporate property interests come from its 50% stake in Brookfield Properties (NYSE: BPO), and the company reported an occupancy rate of 96% for the quarter.
Brookfield Properties, in turn, spawned Brookfield Homes (NYSE: BHS) back in 2003; just in time for a meteoric rise along with the rest of the homebuilding sector, followed by a spectacular fall. While Brookfield Homes consoled shareholders with a smaller loss than last year, the numbers were definitely not encouraging. The homebuilder saw a 46% drop in revenue on 38% fewer home closings, and watched average home sales prices slide an additional 15% from the prior year. As I've noted previously in the case of related plays like USG (NYSE: USG) and Weyerhaeuser (NYSE: WY), homebuilding in North American remains in a fundamental bear market despite a notable up-tick in investor sentiment. I still would place a giant "do not enter" sign next to equities like Pulte Homes (NYSE: PHM).
The best of the lot
With that in mind, is there an attractive vehicle for exposure to the management expertise of the Brookfield empire without the unwanted exposure to housing? Fortunately, the answer is yes. Brookfield Infrastructure Partners (NYSE: BIP) principally holds electric transmission and timberland assets. BIP recorded adjusted net operating income of $8.8 million in the first quarter. That's a 53% decline from a year earlier, but by idling valuable timberlands and pursuing growth with a promising electric transmission development project in Texas, I see BIP as the best-positioned arm of the Brookfield empire to deliver shareholder value under any economic conditions for years to come.
Recent BAM News
- Scout Clean Energy Closes $100 Million Equipment Supply Loan • PR Newswire (US) • 05/06/2024 12:00:00 PM
- Form 6-K - Report of foreign issuer [Rules 13a-16 and 15d-16] • Edgar (US Regulatory) • 05/06/2024 11:00:06 AM
- Brookfield Asset Management and Castlelake to Enter into Strategic Partnership • GlobeNewswire Inc. • 05/06/2024 11:00:00 AM
- SVB Financial Group Enters into Definitive Agreement for the Sale of SVB Capital • PR Newswire (US) • 05/03/2024 03:07:00 AM
- Brookfield and Microsoft Collaborating to Deliver Over 10.5 GW of New Renewable Power Capacity Globally • GlobeNewswire Inc. • 05/01/2024 10:30:00 AM
- Brookfield Asset Management Ltd. Sets First Quarter 2024 Results Conference Call • GlobeNewswire Inc. • 04/12/2024 10:45:00 AM
- Brookfield Announces a Strategic Partnership with Soundcore Capital Partners and Heartland Paving Partners • PR Newswire (US) • 04/04/2024 12:00:00 PM
- Partners Value Split Corp. Announces 2023 Annual Results • GlobeNewswire Inc. • 03/29/2024 02:00:00 AM
- Partners Value Investments Inc. Announces 2023 Annual Results • GlobeNewswire Inc. • 03/29/2024 02:00:00 AM
- Brookfield Asset Management Completes Annual Filings and Announces Management Changes • GlobeNewswire Inc. • 03/19/2024 11:30:00 AM
- Form 6-K - Report of foreign issuer [Rules 13a-16 and 15d-16] • Edgar (US Regulatory) • 02/07/2024 11:45:04 AM
- Brookfield Asset Management Announces Strong Fourth Quarter Results and 19% Dividend Increase • GlobeNewswire Inc. • 02/07/2024 11:45:00 AM
- Form 6-K - Report of foreign issuer [Rules 13a-16 and 15d-16] • Edgar (US Regulatory) • 02/05/2024 12:00:09 PM
- Brookfield Announces $10 Billion First Closing for Second Brookfield Global Transition Fund • GlobeNewswire Inc. • 02/05/2024 12:00:00 PM
- Scout Signs Virtual Power Purchase Agreement with AdventHealth for Texas Wind Farm • PR Newswire (US) • 02/01/2024 01:00:00 PM
- Form 6-K - Report of foreign issuer [Rules 13a-16 and 15d-16] • Edgar (US Regulatory) • 01/18/2024 11:45:06 AM
- Brookfield Asset Management Ltd. Sets Fourth Quarter 2023 Results Conference Call • GlobeNewswire Inc. • 01/18/2024 11:45:00 AM
- Equinox Introduces the Luxe 8700x Payment Terminal • Business Wire • 01/15/2024 12:45:00 PM
- Form 6-K - Report of foreign issuer [Rules 13a-16 and 15d-16] • Edgar (US Regulatory) • 01/09/2024 12:30:05 PM
- Brookfield Asset Management Announces Renewal of Normal Course Issuer Bid • GlobeNewswire Inc. • 01/09/2024 12:30:00 PM
- Form 6-K - Report of foreign issuer [Rules 13a-16 and 15d-16] • Edgar (US Regulatory) • 12/21/2023 06:15:04 PM
- Form 6-K - Report of foreign issuer [Rules 13a-16 and 15d-16] • Edgar (US Regulatory) • 12/21/2023 06:11:04 PM
- Canada Growth Fund Announces Strategic Investment in Entropy Inc. and Carbon Credit Offtake Commitment • GlobeNewswire Inc. • 12/21/2023 06:05:04 PM
- Brookfield and Everise Announce the Successful Closure of Investment by Warburg Pincus, for the Next Phase of Growth • GlobeNewswire Inc. • 12/21/2023 05:29:47 PM
- EVERISE ANNOUNCES SUCCESSFUL CLOSURE OF INVESTMENT BY WARBURG PINCUS, JOINING BROOKFIELD FOR THE NEXT PHASE OF GROWTH • PR Newswire (US) • 12/21/2023 02:13:00 AM
NanoViricides Reports that the Phase I NV-387 Clinical Trial is Completed Successfully and Data Lock is Expected Soon • NNVC • May 2, 2024 10:07 AM
ILUS Files Form 10-K and Provides Shareholder Update • ILUS • May 2, 2024 8:52 AM
Avant Technologies Names New CEO Following Acquisition of Healthcare Technology and Data Integration Firm • AVAI • May 2, 2024 8:00 AM
Bantec Engaged in a Letter of Intent to Acquire a Small New Jersey Based Manufacturing Company • BANT • May 1, 2024 10:00 AM
Cannabix Technologies to Deliver Breath Logix Alcohol Screening Device to Australia • BLO • Apr 30, 2024 8:53 AM
Hydromer, Inc. Reports Preliminary Unaudited Financial Results for First Quarter 2024 • HYDI • Apr 29, 2024 9:10 AM