Those who are brave enough to look for opportunities in this doozy of a bear market certainly have quite a few options to choose from. In this article, I’ve highlighted what I believe to be one of the best opportunities for long-term investors that are on sale.
Brookfield Asset Management
The parent company of the Brookfield portfolio of subsidiaries, Brookfield Asset Management (TSX:BAM.A)(NYSE:BAM) has stood the test of time. I think Brookfield is perhaps one of the greatest Canadian conglomerates on the TSX today.
Brookfield is an excellent acquirer of alternative assets such as real estate and renewable energy. Therefore, Brookfield is an excellent option for investors seeking stocks with high levels of exposure to real, “hard” assets with predictable cash flows. I recently deemed Brookfield a winner to invest in during the mayhem.
Brookfield’s stock price has been hurt by the recent market selloff. However, its price was not impacted as much as other acquisition-focused Canadian companies. Brookfield has a great reputation and high-quality assets. These have acted as protective factors, even in our current market. Thus, Brookfield has and will continue to generate great long-term shareholder value. Now is a great time to buy Brookfield.
Great management and assets
This Canadian conglomerate has perhaps one of the most highly touted and skilled management teams in the country. Prem Watsa leads the management team. He has garnered great favour with investors. Watsa has even been given the very flattering (and deserved) nickname, the “Warren Buffett of Canada.”
The company focuses on acquiring various assets and companies at reasonable valuations. Next, it adds value to these assets through integration within the company’s portfolio. These new assets create additional synergies and therefore more value. Brookfield then uses the cash generated by these businesses to do further acquisitions.
Right now, Brookfield is in the enviable position of sitting on a pile of cash. The company is able to write massive cheques. Therefore, I’d expect Brookfield to start announcing some massive deals in unique opportunities that are only available to a few bidders.
A unique strength
Being structured the way it is, Brookfield also has the unique ability to take advantage of non-public information to do deals. Other companies simply don’t have access to such deals. Therefore, the unique range of possibilities that are open to a company like Brookfield essentially provide enterprising investors access to a private equity-style operation.
Brookfield has extremely stable cash flows and a massive amount of cash. This is truly a unique situation right now given the stress many companies on the Toronto Stock Exchange are under. Most companies are just trying stay alive.
Bottom line
Finding the right mix of safety and long-term growth in this extremely volatile time is very difficult. Brookfield is one of the few Canadian companies out there that checks both boxes, in my view. I expect more volatility to come. I’d recommend investors interested in putting cash to work to ease into any position, including Brookfield. We really have no idea where the bottom is at this time.
Stay Foolish, my friends.
