Up 18 Percent in 2023, Is BAM Stock Still a Buy Today?

Here’s why long-term investors may want to consider Brookfield Asset Management (TSX:BAM) stock in this uncertain time.

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Brookfield Asset Management (TSX:BAM) is a favourite of most investors, as it provides exposure to multiple industrial sectors. In 2023, this stock’s value has appreciated by 18%, providing significant returns to its shareholders. 

Now, given its recent price rise, they are pondering whether this stock still has the potential to grow. 

Here are some reasons why BAM is still a good buy. 

Brookfield to start a massive private debt fund with SocGen

Recently, Brookfield and Societe Generale SA (SocGen) announced plans to start a private debt fund. They plan to raise US$10.7 billion within the next four years, with a seed financing of €2.5 billion. 

This seed fund will focus on two investment strategies. The first will focus on purchasing real assets credit across the transportation, data, midstream, renewables, and power sectors. At the same time, the second one will be for fund finance. It will help both companies tap into the private credit market and generate profitable long-term returns for their investors.

Big capital raise boosts interest in BAM stock

This isn’t the only capital-raising event that has investors excited about BAM stock. In early October, Brookfield raised US$12 billion for its Brookfield Capital Partners VI fund. It is the company’s largest global private equity fund and consists of a wide array of institutional investors like financial institutions, sovereign wealth funds, private and public pension plans, family offices, foundations, and endowments. 

Brookfield itself has contributed US$3.5 billion to this fund. To date, the company has allocated almost US$4 billion from the fund to acquire six market-leading companies. This will help provide meaningful co-investment opportunities to its partners, along with driving future growth for investors. 

Strong Q2 2023 performance

These funds provide investors with the ability to buy into a longer-term growth story. However, for fundamental value investors, assessing the company’s performance using backward-looking data is also important.

In this regard, Brookfield appears to be performing spectacularly well. The company’s second-quarter results showed impressive capital inflows of US$150 billion as well as insurance revenues of US$50 billion. As per Brookfield’s President, Connor Teskey, this strong second-quarter performance indicates the business’s resilience and free cash flow, almost 85% of which comes from long-term funding sources. 

Bottom line

Given the above-mentioned factors, Brookfield still has plenty of growth potential on the horizon. For long-term investors looking for private equity options in this uncertain time, Brookfield Asset Management remains one of the best blue-chip options to consider. I think the company’s status as the best-in-class option in this space should bode well for investors with a long time horizon.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Chris MacDonald has no position in any of the stocks mentioned. The Motley Fool recommends Brookfield Asset Management. The Motley Fool has a disclosure policy.

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