Blue Owl is a cheap asset manager
The bull case argued for Blue Owl Capital is that its stock is trading at a historically cheap valuation despite having highly durable fee income and strong growth prospects.
The argument
The guest argued that Blue Owl has over $300 billion in locked-up, permanent capital under management, meaning 85% of its fees are highly durable. Despite growing revenues rapidly, the stock trades at roughly 9.4 times distributable earnings with a 10.3% dividend yield, which the guest described as a high-quality business trading at a bizarrely low valuation.
The thesis, stress-tested
✓ What validates it
- ✓Revenues growing faster than the previous year's 20% rate
- ✓Continued insider buying of the stock
▸ Risks discussed
- ▸Headline risk from unrelated private credit fund redemptions
- ▸Broader market volatility
Hear it yourself
"You know, these companies like a Blackstone, they trade on distributable earnings, and it's trading at about 9.4 times distributable earnings, and it has a dividend yield of 10.3%."
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