5. The Blackstone Group Inc. (NYSE:BX)
Number of Hedge Fund Investors: 58
Jim Cramer acknowledges that he lacks strong conviction about The Blackstone Group Inc. (NYSE:BX)’s short-term prospects, noting that the stock has recently risen from the $120s to the $130s. However, he is very impressed with The Blackstone Group Inc. (NYSE:BX)’s long-term potential, particularly praising Jonathan Gray and his team for their strategic moves in the data center sector this week.
“Near term, I don’t have a lot of conviction. Blackstone has had a very big run, from the 120s to the 130s. Longer term, I think Jonathan Gray and his team are simply brilliant, and their actions this week in the data center are very strong. I like it.”
In Q2 2024, The Blackstone Group Inc. (NYSE:BX) reported substantial revenue growth of 166.9% compared to the previous year. While its earnings per share (EPS) of $0.96 slightly missed estimates by $0.03, the company’s overall performance remains strong. This strength comes from its diverse investments in real estate, private equity, and credit markets, which help it handle market fluctuations well. The Blackstone Group Inc. (NYSE:BX) also offers a steady dividend yield of 2.34%. The Blackstone Group Inc. (NYSE:BX)’s stock has performed well, up about 4.7% year-to-date and trading around $137, close to its 52-week high of $145.16.
Analysts are positive, with a target price of $128.94, and they expect continued growth due to The Blackstone Group Inc. (NYSE:BX)’s expansion into new areas like infrastructure and life sciences. Although The Blackstone Group Inc. (NYSE:BX)’s high price-to-earnings ratio of 46.27 suggests it is priced at a premium, Blackstone’s strong leadership in alternative investments and its diversified revenue sources support a favorable outlook.
Baron Real Estate Fund stated the following regarding Blackstone Inc. (NYSE:BX) in its fourth quarter 2023 investor letter:
“We remain optimistic about the long-term prospects for Blackstone Inc. (NYSE:BX) and Brookfield because we believe both companies are likely to increase market share in a secular growth opportunity for alternative assets.
Institutional allocations to alternative investment assets such as real estate, infrastructure, and private equity are likely to continue to grow significantly in the years ahead because alternatives have a long track record of generating attractive relative and absolute returns with less volatility than several other investment options.
We are bullish on the long-term prospects for Blackstone and Brookfield. Both companies are led by exceptional management teams that attract and retain exceptional talent. They are two of the largest real estate managers in the world with impressive investment track records. Both Blackstone and Brookfield have global franchises, strong brands, and loyal customers. We believe the shares of both companies are attractively valued and are optimistic about the long-term potential for the Fund’s investments in both companies.”
