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You ever heard of Bill Mackman? One of the greatest investors of all time. Well, he's got a favorite Canadian stock. It's a company called Brookfield. Today, I'm going to talk about if there's still opportunity in that stock. And I'm basing this off of a letter published by Persing Square, which is Bill Aman's hedge fund talking about Brookfield.
I have it right here, just a couple days old, straight from Seeking Alpha. Really, really interesting read. I strongly recommend you stick around. Listen to exactly what he's saying because I think it gives a lot of reasons why this should be on your watch list. Personally, I'm a Canadian dividend and total return investor.
I like to invest in names like this. I like seeing that longerterm opportunity. I really, really like seeing all the things that Brookfield brings to the table. And nobody can deny that it doesn't hurt the company to be at the center of such a massive infrastructure push in Canada right now and to be the financeier of so much interesting infrastructure in the AI boom.
But Bill Aman likes it for a couple different reasons. talks about their undervaluation, the accelerating rate of growth, how they are going to go through some crazy changes as far as generating interest and generating income in 2026, and how they're still at a discount compared to their US peers. Now, we're talking here about Brookfield Corporation, ticker symbol BN.
This is the parent company of all the various Brookfield corporations, and I think it's probably the best one to own. It's the one that most of Brookfield's board of directors own. It's one that Bill Aman owns. Just one of the greatest investors of our time. Personally, my favorite. Now, there's always argument to be made about what things you want to invest in, but this gives you sort of a taste of everything.
And Bill Aman opened this position last year talking about how BN as a stock was undervalued thanks in part to its high accelerating rate of growth in earnings per share. Basically, he saw the opportunity market wasn't noticing it. He also mentions how that in recent quarters, companies advanced several important strategic initiatives which they believe will help them grow earnings while simultaneously simplifying the business and garnering recognition.
So, not only are they doing things that are benefiting the business, they're also doing things that will help other institutional investors understand value here. Bill Aman is a big champion of this where he finds pricing opportunity that other investors don't. And then when you get your pricing in, when you see the stock jump 50, 60, 75, 100%.
That's when you get your exit. And that's how he makes so much money. He talks about how they're making progress growing their annuity and insurance business, which now manages 135 billion in insurance assets. It's quite hefty. Company also continues to improve its communication regarding strategic importance and value of this fast growing source.
This quarter, company announced its intention to reinforce BN to an investment level or sorry, an investment insurance organization with capital increasingly funded by individual investors insurance float. This business evolution is unappreciated by investors. So there is a change in this company that will help them grow that people don't realize and that means there's still pricing opportunity right now.
Critically, Brookfield ALS already manages a trillion dollar portfolio of real assets. So, I'm talking infrastructure, real estate, um power specifically is mentioned on here, uh which are ideally suited for annuity capital given their highly contracted cash flows and inflation indexation. Building on this, uh Brookfield Wealth Services, BWS, recently announced the acquisition of Just Group, which is a UK annuity pension provider.
that'll increase their portfolio by 30% and put them as a major player in the UK market where they're already a large real estate and in infrastructure investor at this sort of point in the company. There's just there's opportunity here. The market doesn't see it and they're growing. Serno financing and stock market conditions have also turned more favorable in recent months to help them simplify the real estate business by selling off some of their non-core and opportunistic real estate investments while retaining their highquality high cash flow trophy assets.
So, they've had some opportunities to sell some things off at good prices. They're also looking at a macro environment that's probably better for them uh in the long run. You think about a real estate portfolio, they're taking on debt to own this real estate. Well, if we're looking at rate cuts, that could be huge for these guys.
They also think they're going to continue to simplify the real estate business in the future, which will be wellreceived, which means that if they don't have such a sort of scatter of holdings, it's easier for investors to really value the company, see what it's worth. And to be honest with you, most of us that are in this name think it's worth more than the market is paying.
Improving market conditions have also allowed them to achieve significant fund level monetizations, help boost the earnings from carried interest over the coming years to provide a significant amount of cash flow for share repurchases, something that we love to hear on the channel, but also strategic growth investments.
We believe they're poised to realize a step function change in carried interest generation beginning 2026. We think they're we again this is Bill Aman one of the greatest investors of all time think they will grow distributable earnings which is the company's metric for earnings per share at a mid- teens percentage before significantly accelerating the growth rate to as much as 30%.
He's calling for 30% EPS growth on an already fairly richly valued stock, which would mean that actually the valuation is cheap because if they're going to massively grow their earnings, then any PE ratio you look at right now is inaccurate. Bill Aman saying that analysts don't get this and hey, they don't.
It like nobody else sees this really. He is one of the very few people who sees that huge opportunity next year. 30% EPS growth would be wild. Again, PE ratios are going to be so much cheaper than is currently expected. And the price is going to have to change. It's going to have to move fast and hard to realize that PE.
I mean, if if they're growing at, let's say, conservatively 10% more than most analysts are expecting, well, you're going to have to see the company jump a significant margin to keep up. Really, really impressive. They've also made progress in expanding their potential US investor base, expanding its sellside investment coverage and making progress towards Brookfield Asset Management, US index inclusion, which could be huge for them.
Uh it might be a potential precursor to similar actions by BN. Recognition of some of this progress, investors have assigned a higher valuation multiple to their earnings over the past year. So essentially, if they can make it and they can list themselves as a US stock, they can make it on the S&P 500 potentially, which will be huge for them as far as institutional investor base.
a lot more money flowing into BAM, which they own a big chunk of. They also believe they're an extremely attractive investment with 20% compound growth in cash flows over the medium-term and potential for further earnings, multiple expansion. And and man, look at all these long positions. Hey, really interesting.
This is like the lifetime of Bill Aman's. You've got things right now Nike, Hertz, Brookfield, Seapport. Um, man, Google, right? Oh, they're killing it on that one. And it's really, really interesting to see. But I think really the story here, Brookfield is growing and it's growing fast and people are discounting it.
People look at it, they say, "This thing is richly valued. They say the PE is too high. I don't want to own it." But Bill Aman again one of the great investors of our time not only is holding the stock not only is cons like it's still about 11% of his portfolio even as he makes all these moves in a very very volatile and fastmoving market he's happy with this stock he thinks this is where he wants to be at a time when you've got AI names flying we mentioned like mag seven names like Google are killing it Bill Aman wants Brookfield field, there's smoke, there's usually going to be fire.
So, I really recommend if you are an investor and you are a Canadian investor and you are looking for something that's a little bit different, right? Your portfolio is a lot of tech like most of us, right? Most of our portfolios, you own the S&P 500 is a big chunk. You got a lot of tech in your portfolio.
Maybe you, like me, own some natural resources here in Canada. You own some banks. You own uh maybe a a telecom company. you know, maybe a grocery chain, right? That that's a very classic Canadian portfolio. These guys, they got to be on your watch list. If it really does grow the way that Bill Aman himself is expecting, this thing could jump in the next year.
Again, I'm talking like 50 through 100% gains in a year. And if he is willing to bet not only his, but clients money on that, I'm at least willing to watch. So, that's what I'm saying right now. I think this needs to be on the watch list. I'm not saying you need to buy this. I'm not saying you need to, you know, you need to jump out of something, jump into this position.
I'm recommending you check it out and that you read about it. You follow along, you watch the earnings, you watch where things are going because it looks like there's an opportunity here. Uh I personally own a little bit of this stock. It's definitely not a huge position uh in my own personal portfolio.
Hey, I'm really excited to be along for the ride cuz I think this stock is going places. And again, it doesn't hurt them to be in such a powerful position at a time when infrastructure investment is expanding. And you got to imagine, considering the guys who are cutting the checks that Brookfield's going to be on the other side, wouldn't you want to be one of the guys getting a check?
That's about all I have for you folks today. Thanks for watching the video. If you made it this far, please do like. If you like what we do here on the channel, please do subscribe. And as always, hope I see you in the next
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