Post by
retiredcf on Jan 25, 2023 8:01am
Increased Weighting
Balanced Equity Model Portfolio
Increase Brookfield Corporation (BN) to a 4.0% Weighting
Trade Rationale – BN now operates as a holding company that owns stakes in different companies that are either private or public (ex: BIP, BEP, BBU, etc.). BN is expected to pay a lower yield than BAM going forward, and it will focus on reinvestment and growth. With the Brookfield split now complete, we feel that BN is slightly misunderstood by the broader market and this company has the ability to return significant shareholder value over the coming years.
Increase Brookfield Asset Management (BAM) to a 2.0% Weighting
Trade Rationale – As part of the Brookfield split, BAM is an asset manager, raising money from investors and investing in assets such as infrastructure, private equity, energy, real estate, etc. It earns revenue from fees on the assets it manages, as well as performance fees. 90% of BAM’s distributable cash will be paid out as dividends, and its distributable earnings are expected to grow 15% to 20% in the next five years. We feel that with this recent split, the true intrinsic value of BAM can now begin to be realized. (5iResearch)