BIP - Brookfield: Still At NAV Discount Despite 26% Gain
2024-01-31 08:45:00 ET
Summary
- Brookfield Corporation is a complex financial holding company, with wholly-owned subsidiaries, partially owned subsidiaries, and a stock portfolio.
- Some investors find the company's structure confusing and have concerns about its accounting practices.
- Brookfield's structure itself isn't complex; rather, the complex accounting creates a false perception of complex structure. The accounting is complex due to differences between the equity and consolidation methods.
- I consider Brookfield a buy because of its 35% discount to NAV, and strong performance in its operating businesses.
- In this article, I explain my bullish thesis on BN in detail.
Brookfield Corporation ( BN )( BN:CA ) is considered one of the most "complex" financial companies in the world. It consists of a holding company, on top of several wholly-owned subsidiaries, and some partially owned subsidiaries, one of which operates the company's funds. It's a confusing structure that has led some to feel mistrust of the company and its CEO, Bruce Flatt. Back when Brookfield was known as "Brookfield Asset Management," the Foundation for Financial Journalism accused the company of having a "pyramid" structure, of the sort that Ben Graham famously criticized in The Intelligent Investor. ...
Brookfield: Still At NAV Discount Despite 26% Gain