Blackstone jumped onto the IBD 50 Stocks To Watch list by trading among the market’s more impatient stocks in 2021. Buying opportunities come and go quickly for such stocks, so investors must remain on their toes.
Blackstone (BX) shareholders had a good year in 2019. Shares soared nearly 90%, even as earnings were flat. Now, after taking a tumble in 2020, earnings are projected to rebound 147% this year. Revenue growth has accelerated through the past three quarters. And the stock has a reasonable shot at beating its 2019 increase.
Blackstone operates in four segments: real estate, private equity, hedge fund solutions, and credit and insurance. The asset manager and financial advisory outfit reported almost half of the company’s (prepandemic) 2019 revenue was investment income. An equal amount came from management and advisory fees.
The company reported $684 billion in assets under management at the end of the second quarter. Almost 33% of that was in private equity. Just over 30% was in real estate, around 25% in credit and insurance, and the rest in hedge fund solutions.
Stocks To Watch: Blackstone Gets Busy
At the start of August, a Blackstone-backed media group made a $900 million deal to acquire actress Reese Witherspoon’s Hello Sunshine media production business. In July, Blackstone took a $2.2 billion stake in American International Group‘s (AIG) life insurance and retirement unit.
Blackstone’s Real Estate Income Trust subsidiary agreed on Aug. 9 to pay $3.1 billion for distribution and logistic property landlord WPT Industrial Real Estate Investment Trust.
For those who concern themselves with such things, Blackstone co-founder and CEO Stephen Schwarzman is a leading financial donor to Republican causes. He supplied $33.5 million to conservative political entities during the 2020 election cycle, according to campaign finance watchdog OpenSecrets.org.
Blackstone shares gained 15.8% in 2020. They are up more than 76% so far in 2021. The stock’s last real breakout came in November.
It offered investors a follow-on, or follow-up buying opportunity in March on a rebound from its 10-week moving average. At the end of last week, Blackstone stock put the finishing touches on a three-weeks-tight pattern with a buy point at 117.75.
A follow-on entry, such as a rebound from support or a three-weeks-tight pattern, is a good place to add to an existing position. It is not generally recommended as a place to jump into a stock from scratch. But Blackstone has been so stingy with buy points, a healthy breakout past the buy point could be tempting.
Blackstone’s Technical Cred
For investors tempted to jump into a new position, keep in mind, the stock has a nearly vertical nine-month rally under its belt and hasn’t paused to take a breath. So, chances are good there is some pressure to consolidate at least some of its recent gains.
Still, Blackstone has held firm support at its 21-day exponential moving average since its March test. Shares pulled back for another test of that line on Tuesday.
Blackstone’s Relative Strength Rating is a powerful 96, and its relative strength line is trading just off its recent highs. In addition, the stock is trading a nominal 41% above its 200-day moving average. That is well below the 70% to 100% that can indicate a stock is becoming overheated.
Deutsche Bank upgraded Blackstone to buy on Wednesday, and lifted its price target to 135 from 112. The report also raised ratings for a couple other stocks to watch, KKR (KKR) and Carlyle Group (CG).
Find Alan R. Elliott on Twitter @IBD_Aelliott
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