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Recent Buy

June 28, 2016

 

One of the goals of this blog is to track my stock buys for my own personal benefit. Tracking these buys gives me a history of my decisions that I can reflect on in the future, whether they turn out to be wise purchases or not so wise purchases.

 

In addition to my own personal benefit, I hope that individuals reading this blog will react to my actions. I believe it is never bad to have a second set (or many sets) of eyes on your work. I welcome criticism and praise, both equally, as I am only trying to become a better investment evaluator. Embracing improvement is important to me and I can’t do it all on my own!

 

The following information represents key information I utilized in my purchase decision

 

The Purchase Facts

 

Company Name: Blackstone Group, L.P.

Ticker: BX

Purchase Date: June 26, 2016

Purchase Price with Fee: $23.51

Shares Transacted: 40

Total Investment: $940.37

 

The Company Dividend Facts

 

Dividend Per Share (TTM): $2.12

Purchase Dividend Yield: 9.01%

Payment Frequency: Quarterly

 

DividendStacker Dividend Facts

 

Purchased in What Account? Taxable Brokerage

Previous Forward 12-Month Dividend: $212.63

New Purchase Dividend: $84.80

Account New Forward 12-Month Dividend Total: $297.43

 

Other Factors Considered

 

Considering my long-term investing focus, my analysis for company purchases is fairly unscientific, I like to evaluate a few relative statistical factors as well as a couple qualitative factors at a high level. Digging too deep into trivial details not only strays from my long-term focus but also just quickly turns into a self-inflicted headache.

 

About the Company: The Blackstone Group is actually a Limited Partnership that focuses on private equity, investment banking, and alternative investing. They tout themselves as the largest alternative investment firm in the world. They are highly diversified, however they are very active in the real estate sector, which is the primary reason for my investment.

 

Company Management: This is the secondary reason for my investment. I believe that Blackstone is run by the best of the best. Stephen A. Schwarzman has focused on investing in human capital throughout his time at the helm of the Blackstone Group and it continues to pay off.

 

Tax Situation: It is important to note that since Blackstone Group is a Limited Partnership, its treatment come tax time differs from typical dividend stocks. The dividends are actually either return of capital or earnings distributions. If you think you may be considering investing in Limited Partnerships, you should research the tax implications or consult a tax professional.

 

Speaking of the dividend: There is no consistency in the amount distributed by BX to shareholders, so some of the information listed in the facts above may change significantly, for better or worse. The board of directors distributes either earnings or returns of capital as they see fit. I am ok with these fluctuations in the income, even if it makes it somewhat harder to project.

 

Bottom Line

 

I determined about a year ago that the Blackstone Group was going to be a core part of my portfolio for the long-term. Since this determination it has just been a matter of getting shares at an optimal price point. The Brexit fears over the last couple of days led to an attractive price point for me to add to my position. With the addition of these 40 shares, I now hold 100 shares of Blackstone and may consider adding more if weakness continues.

 

While the Brexit vote has led to many investors believing that the Blackstone Group will face Forex headwinds due to their worldwide investment exposure, I actually believe it provides the company the chance to utilize its massive piles of cash to scour the globe for cheap investments.

 

What do you think about the purchase? Have you made any post-Brexit vote purchases? I will be keeping my eye on many financials stocks the rest of the week as it appears they have gotten the brunt of the recent worldwide market selling.

 

Disclosure: I am long BX.

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