Barbarians at the Gate is the engaging book written by investigative journalists Bryan Burrough and John Helyar published in 1989 and later made into the entertaining film by the same name in 1993. Both sit on my shelves.
It is the story of the leveraged buyout (LBO) of RJR Nabisco that was eventually acquired by Kohlberg Kravis Roberts & Co. (KKR), which was founded and led by Henry Kravis and his cousin, George Roberts (along with their partner, Jerome Kohlberg).
It is a well-done tale of the LBO approach that was all the rage in the 1980s as heavy debts were raised in the low-credit grade (junk) bond market to finance the takeover of companies. And in turn, post-LBO, the companies would be reworked, used to generate lots of cash for the buyers and eventually be sold or broken up for further gains.
I’m starting off with this as the introduction to the big gains getting booked by investors and traders in private equity companies and their stocks. And in a moment, I’ll be presenting the private equity stock to buy right now so you, too, can invest like a barbarian.
KKR Blueprint for Profits
KKR is now a public company that allows anyone to invest in what now is called private equity. It and its peers, Apollo Global Management, Inc. (APO) and another that I’ll present, have been great successes over the past years in the stock market, combining gains with dividends for bigger total returns.
Private equity companies buy out large and small companies alike, clean them up, maximize cash that they can harvest from their operations and sell them off either in piecemeal or whole for gains as quickly as possible.
This formula has worked and worked well for the principals of the companies and their shareholders, as Kravis and Roberts have become extremely wealthy, much more so than their peers in traditional investment banks such as JPMorgan Chase & Co. (JPM) and personally for its head, Jamie Dimon.
For the trailing five years, KKR has returned 416.82%, and this is aped by its peers, including Apollo, with its total return for the same period of 371.06%.
KKR is now gaining more attention, as this week, Kravis and Roberts are stepping back and turning over the reigns to Scott Nuttall and Joe Bae. KKR remains a very interesting and profitable company.
But I have another one for you to buy...
A Foundation of Stone
Blackstone Inc. (BX) is another public company that is both a private equity company as well as a fund manager and real estate investment company. It is now part of our Burst Alerts Pro product run by Josh Martinez here at Traders Agency.
It is larger by assets under management (AUM) than KKR at $649 billion. And it has ample revenue that’s running at $6.5 billion and rising over the past year by 7.68%.
It continues to be highly active, doing deals seemingly weekly in its varied portfolios. Deals include music rights, major properties in growth markets and today there’s a deal in the works for GlaxoSmithKline plc (GSK)’s consumer businesses.
Blackstone has been running rings around KKR over the past five years, with a total return of 527.46%
And Josh has a near term target price for the stock at $125.10 from its current level of $115.24 for a potential shorter-term gain of 8.56%.
Take your cue from the barbarians of private equity… Blackstone is the current trade to make right now.
As always, I want to hear from you as an Insider here at Traders Agency. This includes your thoughts on our work here and what we should be covering and how to improve our services to you.
I can be reached directly at [email protected].
All my best,
Neil George
Executive Editor, Traders Agency
P.S. Company insiders (management) own millions of dollars of Blackstone stock, with 28 buys over the past year amounting to $4.2 million of their own money. To learn how insider buys can be a vital means of identifying the best stocks to buy, check out a very special Insider Edge presentation with Ross Givens right here.
Contact
Courses
About Us
Sign up
Login
Educational Purposes
We (“Traders Agency”) are a provider of educational products that we believe will assist you in trading commodity futures profitably. We do not provide any guarantees, warranties or assurances that by using our educational products, you will be successful in trading commodity futures profitably. The information contained on our website or in any product or service provided by us does not constitute financial advice or a solicitation to buy or sell any commodity futures, currencies, including cryptocurrency, options or securities. We are not a commodity trading advisor, a futures commission merchant, a commodity pool operator, a broker or an investment advisor. We do not make investment recommendations and we do not trade commodity futures or any other investment for our customers. We do not hold customer funds for trading commodity futures or any other investment. You agree that you will not hold us responsible for any losses you may incur in trading commodity futures while relying upon our educational products.
Risk Disclosure Statement
The risk of loss in trading commodity futures contracts can be substantial. You should, therefore, carefully consider whether such trading is suitable for you in light of your circumstances and financial resources. Under certain market conditions, you may find it difficult or impossible to liquidate a position. This can occur, for example, when the market reaches a daily price fluctuation limit (“limit move”). The high degree of leverage (gearing) that is often obtainable in futures trading because of the small margin requirements can work against you as well as for you. Leverage (gearing) can lead to large losses as well as gains. You may sustain a total loss of the funds that you deposit with your broker to establish or maintain a position in the commodity futures market, and you may incur losses beyond these amounts.
Hypothetical or Simulated Results
Our educational products rely upon hypothetical or simulated performance results. These results have certain inherent limitations. Unlike the results shown in an actual performance record, these results do not represent actual trading. Also, because these trades have not actually been executed, these results may have under- or over-compensated for the impact, if any, of certain market factors, such as lack of liquidity. Simulated or hypothetical trading programs in general are also subject to the fact that they are designed with the benefit of hindsight. No representation is being made that any account will or is likely to achieve profits or losses similar to those shown.
Testimonial Disclosure
We often include testimonials from previous customers who have used our educational products. You should be aware that:
The testimonial may not be representative of the experience of other clients.
The testimonial is no guarantee of future performance or success.
We do not pay or provide any compensation to any person who has provided a testimonial.
Sign in/up with Facebook
Sign in/up with Twitter
Sign in/up with Linkedin
Sign in/up with Google
Sign in/up with Apple
Wouldn't it be a good idea to create a course?
