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FIG - Sector Heavy Hitter With Value Price

|Includes:Fortress Investment Group LLC (FIG)

I always attempt to find companies that are in multiple sweet spots to minimize downside risk, margin of safety as it's called. It doesn't seem like an overly complicated concept, but it does seem like one lost on many players in the stock market.

When I first found Fortress Investment Group (NYSE:FIG) it was trading around $6.60 in June 2013 and it looked like a great investment, solid dividend, good growth prospects, good valuation relative to current and future projected earnings. And I thought the story was playing itself out, as it shot past $8 in the subsequent months, I thought the train had left the station.

Well the train came back around once more, with a 33% higher dividend yield and more cash in the coffers. And with a market that looks like it will take a tumble here soon this name looks to be a very attractive investment at an attractive range of entry points in the near term, for the long term.

Current FY EPS projections sit at 91 cents, roughly 390 million dollars, and with a market cap around 3.1 billion you're looking at a company trading under 10x. Subtract the cash this begins to look even more attractive. Add a ~4.5% dividend and a 52% projected 5-year EPS growth rate this begins to look overwhelmingly positive.

I don't necessarily think Fortress can execute on the EPS growth number, nor would I need that to view it as an attractive investment. It could do 30% of that number and still be attractive, even without the dividend. But if it did? If it did it's laughably cheap right now. And that's why I own it.

Buying Fortress is like buying a widely diversified portfolio of alternative investments at an attractive valuation, with growth, and a dividend that beats the 30-year US treasury and should do so in the medium term.

Disclosure: I am long FIG.

Stocks: FIG