Oaktree Capital Is Poised To Rebound
Alpha Gen Capital
Alpha Gen Capital
Oaktree: Sum-Of-The-Parts And Secular Tailwinds Point To Undervalued Units
Alpha Gen Capital • 31 Comments
Alpha Gen Capital • 31 Comments
Mon, Aug. 29, 1:48 PM
- Shares of aluminum makers are higher after privately-held aluminum rolled products producer Aleris agreed to be acquired by China's Zhongwang for $2.33B, in a bet that the U.S. automotive aluminum sector will be the industry's next big growth market.
- Since 2010, Aleris has been owned and controlled by a group led by investment funds of Oaktree Capital Management (NYSE:OAK).
- Aleris is in the midst of a $350M expansion of its Lewisport, Ky., rolling mill to produce automotive body sheet for U.S. auto manufacturers, and hopes to produce 200K metric tons/year and begin shipping in 2017.
- Shares of other publicly traded aluminum companies are up, including Alcoa (AA +2.4%), Century Aluminum (CENX +2.7%), Kaiser Aluminum (KALU +1%) and Constellium (CSTM +12.9%).
Thu, Jul. 28, 8:33 AM
Wed, Jul. 27, 5:30 PM
- AB, ABMD, ACIW, ACOR, ADP, AEP, ALKS, ALLE, ALXN, AMT, APD, ARIA, AZN, BC, BCC, BCO, BCOR, BEN, BG, BGCP, BHI, BMS, BMY, BSX, BWA, BWEN, BZH, CAB, CBG, CBM, CELG, CFX, CIT, CL, CLF, CLFD, CME, CMS, COMM, COP, COR, CRR, CRS, CS, CSH, CVI, CVRR, CWT, DBD, DFT, DLX, DOW, DSX, EME, EPD, EQM, EQT, EXLS, F, FCFS, FCN, FI, FIG, FITB, FLY, FSS, GLOP, GNC, GOV, GPI, GPN, GRUB, GTLS, HCA, HEES, HOG, HP, HSY, HTH, IART, IDA, IGT, INCR, INGR, IP, IPGP, IRDM, ITC, ITG, IVC, IVZ, KEM, LAD, LAZ, LDOS, LEA, LKQ, LLL, LPG, MA, MCS, MD, MDP, MDWD, MINI, MITK, MJN, MKTX, MMC, MNRO, MPC, MPLX, MSCI, MTH, MTRN, MVIS, NAP, NEWM, NICE, NMR, NOV, NTCT, NYT, OAK, ODFL, ORI, OSK, PAG, PCG, PES, PF, PJC, PNR, POT, PRLB, PTEN, PX, RDN, RDS.A, RPM, RTN, SCG, SEE, SERV, SFE, SPB, SPGI, SQBG, SQNS, STNG, SXC, SXCP, TCK, TFX, TGI, THRM, TKR, TMO, TPX, TREE, TRI, TZOO, UAN, UBSI, UTHR, VC, VGR, VIVO, VNTV, WCC, WILN, WRLD, WST, WWE, YNDX, ZBH
Fri, Jun. 24, 3:13 PM
- With London's status as a financial hub, Brexit raises questions over just how firms - including U.S. asset managers - will do business on the Continent from the City (such as selling financial products) under the new regime.
- The good news, says Citi's William Katz, is the poor performance of most of the sector means investors may have already priced in falling NAVs and AUM.
- The worst of the fallout, says Katz, will hit those managers with the largest presence in the U.K., including Invesco (IVZ -13%) and Affiliated Mangers Group (AMG -10.8%). Again, the recent struggles for both these stocks means the blow could be softer than feared.
- While the whole affair could make for good buying opportunities for private-equity funds, that doesn't mean the stock prices of players like Carlyle Group (CG -2.8%), Blackstone (BX -5%), KKR (KKR -6%), Fortress (FIG -3.9%), and Oaktree (OAK -1.7%) couldn't come under a great deal of pressure in the short term.
Thu, Jun. 2, 12:54 PM
- Led by nearly $1B of net inflows in May in the DoubleLine Total Return Bond Fund (MUTF:DBLTX), assets under management at Jeff Gundlach's shop reached $100B last month.
- Year-to-date inflows at DoubleLine are $9.05B, led by $7.2B from the Total Return Bond Fund.
- It's good news for Oaktree Capital (NYSE:OAK), which paid $20M in 2009 for a stake in DoubleLine that's so far paid out more than $150M and now is likely worth $1B or more ... a pretty fair ROI for Howard Marks and company.
Wed, May 18, 3:37 PM
- Former BofA banker Bill Egan was hired by Oaktree (OAK +0.9%) two years ago to start a reinsurance venture. and his exit follows a struggle to raise enough funds to set up an operation with enough scale.
- Oaktree had hoped to team up with XL Group, but investor interest in the industry isn't exactly strong thanks to too much pricing competition. John Paulson recently shuttered a reinsurer and Dan Loeb's Third Point Reinsurance is selling for less than its 2013 IPO price.
Thu, Apr. 28, 8:33 AM
Wed, Apr. 27, 5:30 PM
- AB, ABBV, ACOR, ADP, AEP, AET, AIT, ALKS, ALLE, ALXN, AME, APD, ASPS, AUO, AVT, AXTA, BC, BCOR, BG, BLL, BMS, BMY, BOFI, BWA, BWEN, BXLT, BZH, CAB, CAH, CBG, CCE, CELG, CHTR, CIT, CL, CLF, CLFD, CME, CMS, COMM, COP, COR, CRCM, CRI, CRR, CSH, CVI, CVRR, CWT, CY, DBD, DFT, DLX, DNKN, DOW, DPZ, EME, EPD, EQM, EQT, F, FCFS, FCN, GEO, GLOP, GNC, GOV, GTLS, GWR, HAR, HEES, HHS, HMC, HUN, I, IDA, IDCC, INGR, INSY, INT, IPGP, IQNT, IRDM, IRM, ITC, ITCI, IVC, IVZ, KERX, LANC, LBY, LKQ, LVLT, MA, MD, MDP, MHO, MINI, MITK, MJN, MMC, MO, MPC, MPLX, MSCI, MTH, NEE, NEWM, NOV, OAK, ODFL, ORI, OSK, PF, PJC, POT, PPL, PRLB, PTEN, QSR, RGS, RTIX, RTN, RUTH, SABR, SCG, SEE, SFE, SIRI, SNAK, SNE, SPB, SPIL, SQNS, TFX, THRM, TMO, TOWR, TPX, TWC, TZOO, UAN, UBSI, UFS, UPS, UTHR, VA, VAC, VC, VIAB, VIVO, WCC, WM, WNS, WST, XRS, YNDX, ZBH
Tue, Mar. 15, 4:18 PM
- A sign of the times: Clayton Williams Energy this month announced it was borrowing $350M from Ares Management (NYSE:ARES) to replace an equivalent loan from a consortium of banks. For its part, Ares charges a higher rate than the banks, and received the rights to buy up to 18.5% of the company and appoint two to the Clayton board.
- Clayton had no choice, and for Ares it's "loan-to-own" - either it makes plenty on the loan (12.5% interest) or it potentially winds up with the company in a bankruptcy.
- Look for similar deals to be struck this spring, with shops with big credit units like Blackstone (NYSE:BX), Apollo (NYSE:APO), and Oaktree (NYSE:OAK) prime candidates to take the lead.
- Source: Reuters' Koh Gui Qing
Fri, Mar. 11, 8:34 AM
- The analyst team lead by Brian Bedell is altering its valuation methodology for private-equity players from multiples of distributable earnings to a sum-of-the-parts model. The "volatile backdrop" makes one-two year distributable earnings estimates "highly uncertain," they say.
- Thanks to its higher sensitivity to real estate than peers, Blackstone (NYSE:BX) is cut to Hold from Buy.
- Within the subsector, Bedell and team like in order: Exchanges, online brokers, large-cap asset managers, trust banks, and at the end of list alternative asset managers (private-equity).
- Their top pick in exchanges is CME Group (NASDAQ:CME), thanks to its leverage to uncertainty on global rate policy, economic growth, oil, and equity markets.
- In online brokerage, Schwab (NYSE:SCHW) is a "solid play" on more Fed tightening.
- In custodial names, the team continues to like a pair trade of long BNY Mellon (NYSE:BK) and short State Street (NYSE:STT).
- For traditional asset managers, Affiliated Managers (NYSE:AMG) is especially undervalued, followed by Invesco (NYSE:IVZ), BlackRock (NYSE:BLK), and T.Rowe Price (NASDAQ:TROW).
- In alternatives, Oaktree (NYSE:OAK) is best-positioned thanks to its ability to put money to work in distressed credit opportunities.
Wed, Mar. 2, 4:12 PM
- Oaktree Capital (OAK +1.7%) has invested in the region for years, but given the energy and commodity bust, now seems to a particularly good time for the distressed asset giant to open an office in Sydney.
- It will be lead by Managing Director Byron Beath, who joined the company this year to focus on Australia and New Zealand.
Thu, Feb. 18, 8:03 AM
- Howard Marks has a career filled with dingers, but Oaktree Capital's (NYSE:OAK) $20M 2009 investment in Jeff Gundlach's DoubleLine Capital stands out. The stake has paid out $158M to Oaktree since, and now could be worth nearly $1B.
- Gundlach started DoubleLine after getting fired by TCW, and his firm's AUM have grown to $85B in the six years since, with the DoubleLine Total Return Bond Fund now at more than $55B after beating 99% of peers over the last five years.
- Wells Fargo's Christopher Harris and Robert Ryan figure the DoubleLine stake accounts for about $5.80 of Oaktree's stock value of $44.60 per share - translating into a value of $893M. Morningtree's Stephen Ellis puts a more conservative number on it, but in any case the ROI compares with the best deals Marks has ever pulled off.
- Source: Bloomberg
Tue, Feb. 9, 9:10 AM
- Oaktree Capital Group (NYSE:OAK): Q4 EPS of $0.26 beats by $0.02.
- Segment Revenue of $212M (-20.4% Y/Y).
Mon, Feb. 8, 5:30 PM
Mon, Jan. 11, 10:13 AM
- Alongside an already-reported downgrade for WisdomTree (it's lower by 6.4% today), Goldman cuts Oaktree Capital (OAK -1.9%) to Buy from Conviction Buy, and Artisan Partners (APAM +0.2%) and Janus Capital (JNS +0.2%) to Neutral from Buy.
- The group of four is down 18-37% over the past year, including double-digit declines in just 2016's first handful of sessions.
Dec. 10, 2015, 1:12 PM
- Raymond James (NYSE:RJF), Bank of New York Mellon (NYSE:BK), Northern Trust (NASDAQ:NTRS), and Bank of America (NYSE:BAC) are best-positioned in the event of a one-and-done move from the Fed, says Goldman, as they get most the earnings upside from the initial move higher in rates, rather than needing "normalization."
- "Deposit betas" may be a source of underappreciated surprise, says Goldman, which doesn't believe banks will pass along much of the initial 50 basis point hike in rates to customers. Poised to benefit here: JPMorgan (NYSE:JPM), BofA, Wells Fargo (NYSE:WFC), PNC Financial (NYSE:PNC), and E*Trade (NASDAQ:ETFC).
- Finally, clarity on the interest rate picture should allow bank managements to get moving in growing returns, Favored "self-help" stories: AIG, Ally Financial (NYSE:ALLY), Oaktree Capital (NYSE:OAK), Voya Financial (NYSE:VOYA), and Zions Bancorp (NASDAQ:ZION).