Brookfield Asset Management (TSX:BAM) is Canada’s most successful pure-play asset management company. Its parent company, Brookfield, is larger, but BAM is a pure play (a stock offering direct exposure to asset management). This makes Brookfield Asset Management much easier to understand than Brookfield, a sprawling company with investments in asset management, insurance, and its own funds.
If you’re looking to start investing in the Brookfield empire, Brookfield Asset Management offers you a relatively straightforward way to get started. The company’s business model can be understood with just an hour or two of reading, which is very different from Brookfield, which requires a lot of research before you can understand how all the pieces fit together.
One of the most important things for investors to know about Brookfield Asset Management is what the company has on its agenda. Brookfield and BAM are very “busy” companies, constantly announcing new deals and other projects. In this article, I’ll explore the latest news on Brookfield Asset Management, along with some things coming up on the calendar shortly, to help you make an informed investment in the stock.
Resolution of debt issues
The first big news item about BAM we need to keep an eye on this year is the resolution of Brookfield funds’ debt problems. Brookfield-affiliated funds have defaulted on debts several times already this year. The more this happens, the harder it will be for BAM funds to raise money, as the company will be seen as having deteriorating creditworthiness. So, we will want to see Brookfield and BAM bring their funds’ defaults to an end. Otherwise, there could be trouble for shareholders.
New acquisitions
Another big item on the agenda for Brookfield Asset Management is acquisitions. Brookfield, the parent company, has been busy doing M&A deals all year long, and has a few big ones still in the works. These include:
- A deal to buy Des Moines-based American Equity, an insurance company.
- An acquisition of Duke Energy’s renewables business.
- A $2.2 billion deal to buy the Middle Eastern payment processor Network International.
These deals mostly pertain to Brookfield corporation, but BAM sometimes buys entire companies on behalf of clients as well, so there could be some items of interest in the year ahead.
Upcoming earnings
Last but not least, we have Brookfield’s upcoming earnings release. Brookfield is expected to release earnings in the middle of August. The release will show whether or not the company can keep up its impressive growth track record. Last quarter, BAM beat analyst earnings estimates. If it beats them again, then its stock may have upside.
It’s impossible to say whether Brookfield will meet, beat, or lag its earnings expectations. It’s a complex business with a lot of moving parts. However, BAM has a track record of beating earnings more often than not. On the whole, I think it fairly likely that BAM shareholders will see positive growth in revenue and earnings in the upcoming quarterly release. That alone is a reason to get excited about BAM stock.
