Put in $2000, then purchased:
$300 for APO
$300 for BN
$300 for PAX
$466.53 for OWL
$500 for AHH
$300 for HASI
$300 for PYPL
$300 for UNH
The market has hit an all-time high today and my portfolio went up a lot recently. The alternative asset managers were doing very great. PAX reached a 52-week high recently, and the underdog $OWL also recovered a little bit. $APO and $BN also kept climbing up steadily.
I got seven hundred and change from dividends from my previous portfolio update, so I was able to add much more than the $2000 contributed into my portfolio.
With that said, the alternative asset managers were still undervalued, trading at below forward 20 P/E with 10-15% annual return and generous dividend payout (for the cases of OWL and PAX), so I am adding more again.
AHH has been stalling for a year given its dramatic dividend cut early 2025. It is now a much safer company in terms of debt servicing. It has assets which are growing income, and it gives 8.5% dividend yield. It doesn't take much for the stock to perform well from now.
HASI is trading at around 5% dividend yield. I was always skeptical of its sustainable dividend growth rate. I suspected it could only grow around 5% given the retained earnings ratio and its return on equity. That being said, I am seeing its EPS growing at mid to high single digit while the management expects to keep growing at 8-10%. It's possible that the sustainable dividend growth rate can reach 6-7% long term, so 5% dividend yield is not bad for this company that invests in very safe assets for income.
I also added more into PYPL and UNH because they are asset-light companies and are trading at a value stock multiple (e.g. 12 P/E for PYPL at 16 P/E for UNH that has 2.7% dividend yield).
The cheap multiple mostly comes from them hitting some short-term wall in growth. PYPL is not a big conviction of mine given its market position is being challenged from front and back by platform payment solutions (e.g. iOS, Android) and other similar digital wallets, but it is still holding its base, so the stock still has a pretty good chance to do well if some of new features like smart receipts and AI offers, or its main app shopping takes off.
UNH is recovering from its cost estimation mistakes. The good thing about health insurance in the United States is that their premiums can usually go up enough to cover their costs over time, so I am not so worried about its long term fundamentals.
Transactions
Recent and upcoming dividend distributions
Portfolio performance snapshot
Total return:
One-year return:
Portfolio IRR (calculation): 24.82%
Approximated IRR for an SPY-only portfolio: 19.14%
Individual holdings:
Breakdown by categories (real-time):
Total returns for individual holdings:
Last prices:
Portfolio holdings conviction
The convictions in the table below reflects my current opinions and will guide the future contribution of additional investment to existing holdings. Stocks not inside the table are stocks with subpar return on equity that will be very unlikely to receive more contributions from new money (there can be exceptions for very cheap stocks).
Conviction in long-term prospects means how much I believe a company would match or outperform the market (e.g. S&P 500) in the long run. Valuation matters so the conviction generally corresponds to the neutral rating of Valuation. It has the following ratings: weak, moderate, strong
Valuation: greatly overvalued, overvalued, slightly overvalued, neutral, slightly undervalued, undervalued, greatly undervalued
Brief comments on individual holdings
Most Brief analysis and latest updates are here:
AHH, AMZN, BABA, BIDU, BN, BTC, HASI, HHH, HOOD, MAIN, META, NNN, NVDA, OWL, PAX, PYPL, TSLA, TSM, UNH, XYZ, ETFs like SPY, VWO
Below are incomplete writeups:
BRK.B
Berkshire Hathaway in the current form was found by my idols, Warren Buffett and Charlie Munger. I will try to buy more if it's not very expensive.
APO
Apollo specialized in distress situations, which reduced the number of competitors. Its famous slogan is purchase price matters, which shows how price conscious they are in picking investment. It has another slogan "we want 25% of everything and 100% of nothing on the asset", which is a goal post of the company about engaging in a lot of asset managing transactions even for other asset managers. It's a good way to position the company to have a large adjustable market. Their use of reinsurance company, Athene, helps them to grow assets under management effortlessly as well.
[2025/04/04] Expected 2025 EPS is $8.3, so P/E around 13.25, pretty cheap with an expected growth of 10-15%. 1.68% dividend yield helps a bit as well.
BAM
The pure asset management company part of the Brookfield Corporation. With BN, BAM can grow its asset under management (AUM) easily. Oaktree Capital, founded by the famous Howard Marks, is part of it, so it's very reputable.
The management has already indicated they are locked in to grow its cash flow 15% annually for the next field years. Its management fees do not rely on performance that much, so they are stable. With an expected 2023 EPS of $1.39, P/E 25 is not cheap, but with the help of 3.8% dividend yield (close to 100% payout, thanks to the asset light business model), there is a fair chance the stock can return 15% annually.
BX
A very reputable company in real estate. Its management fees rely on performance much more than Brookfield, but Blackstone has a track record, so I am not too worried about it.
Expected 2023 EPS is $4.36, P/E ~ 21. A 3.5% dividend yield with expected annual growth of 10-15%, this stock can potentially get a 15+% return in the long run.
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