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
- Brookfield and Castlelake Complete Strategic Partnership Transaction • PR Newswire (US) • 09/17/2024 12:00:00 PM
- Brookfield to Invest Up to $1.1 Billion in Infinium to Scale Ultra-Low Carbon eFuels • PR Newswire (US) • 09/10/2024 11:00:00 AM
- Form 6-K - Report of foreign issuer [Rules 13a-16 and 15d-16] • Edgar (US Regulatory) • 09/09/2024 08:30:08 PM
- Brookfield Asset Management and Brookfield Corporation to Host Investor Day on September 10, 2024 • GlobeNewswire Inc. • 09/09/2024 08:30:00 PM
- Scout Clean Energy Brings on Renewables Leader Kris Cheney as new Chief Development Officer • PR Newswire (US) • 08/21/2024 04:00:00 PM
- Partners Value Split Corp. Announces 2024 Semi-Annual Results • GlobeNewswire Inc. • 08/19/2024 09:30:00 PM
- Partners Value Investments Inc. Announces Q2 2024 Interim Results • GlobeNewswire Inc. • 08/19/2024 09:30:00 PM
- Form 6-K - Report of foreign issuer [Rules 13a-16 and 15d-16] • Edgar (US Regulatory) • 08/09/2024 08:57:37 PM
- Form 6-K - Report of foreign issuer [Rules 13a-16 and 15d-16] • Edgar (US Regulatory) • 08/07/2024 11:19:06 AM
- Brookfield Asset Management Announces Strong Second Quarter • GlobeNewswire Inc. • 08/07/2024 11:10:00 AM
- Chorus Aviation annonce une entente visant la vente de son secteur de la location d'appareils régionaux • PR Newswire (Canada) • 07/30/2024 11:30:00 AM
- Chorus Aviation Announces Agreement to Sell its Regional Aircraft Leasing Segment • PR Newswire (Canada) • 07/30/2024 11:30:00 AM
- Form 6-K - Report of foreign issuer [Rules 13a-16 and 15d-16] • Edgar (US Regulatory) • 07/09/2024 11:30:07 AM
- Brookfield Asset Management Ltd. Sets Second Quarter 2024 Results Conference Call • GlobeNewswire Inc. • 07/09/2024 11:30:00 AM
- Form 6-K - Report of foreign issuer [Rules 13a-16 and 15d-16] • Edgar (US Regulatory) • 06/13/2024 11:00:07 AM
- Brookfield Opens Fundraising for Catalytic Transition Fund with Anchor Commitment from ALTÉRRA Targeted to Raise up to $5 billion to Scale Up Climate Finance in Emerging Markets • GlobeNewswire Inc. • 06/13/2024 11:00:00 AM
- Form EFFECT - Notice of Effectiveness • Edgar (US Regulatory) • 06/12/2024 04:15:09 AM
- Form 6-K - Report of foreign issuer [Rules 13a-16 and 15d-16] • Edgar (US Regulatory) • 06/08/2024 01:44:26 AM
- Brookfield Asset Management Announces Results of Annual Meeting of Shareholders • GlobeNewswire Inc. • 06/07/2024 09:52:10 PM
- Form 6-K - Report of foreign issuer [Rules 13a-16 and 15d-16] • Edgar (US Regulatory) • 06/07/2024 09:12:25 PM
- Form 6-K - Report of foreign issuer [Rules 13a-16 and 15d-16] • Edgar (US Regulatory) • 05/31/2024 08:06:56 PM
- Brookfield enters into exclusive negotiations with Impala and other shareholders to acquire a majority stake in Neoen and launch a mandatory tender offer for 100% of the company • GlobeNewswire Inc. • 05/30/2024 10:55:00 AM
- Partners Value Split Corp. to Partially Redeem Its Class AA Preferred Shares, Series 8 • GlobeNewswire Inc. • 05/16/2024 06:22:30 PM
- Form 6-K - Report of foreign issuer [Rules 13a-16 and 15d-16] • Edgar (US Regulatory) • 05/08/2024 10:45:07 AM
- Brookfield Asset Management Announces Strong First Quarter Results • GlobeNewswire Inc. • 05/08/2024 10:45:00 AM
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HealthLynked Launches Virtual Urgent Care Through Partnership with Lyric Health. • HLYK • Sep 19, 2024 8:00 AM
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