Our Stock of the Week is Blue Owl Capital, Inc (OWL). OWL is an asset manager heavily involved in private credit. It has similarities to Blackstone (BX) but has better numbers and is not as well known. Recently, the Abu Dhabi state fund, Mubadala Investment Company, committed $1 billion to OWL’s credit platform.
OWL is an asset-light company and has a minimal balance sheet. Its goal is to distribute earnings on a regular basis, and it is looking for dividends of over $1 per share by 2025. It is currently selling with a PE of around 20x on earnings of $0.64 for calendar year 2023, which is expected to grow 16% in 2024 to $0.74. The current dividend is around $0.56 per share
Technically, the stock attempted to break out on Friday but pulled back to the breakout point due to poor market conditions. We are looking for it to regroup and make another push in a better market. This company should benefit from higher interest rates since its current cost of capital is around 3%.
As always, we would not chase the open on Monday but will look for opportunities to aggressively trade it as the price action develops.
This post is for educational purposes only! This is not advice or a recommendation. We do not give investment advice. Do not act on this post. Do not buy, sell, or trade the stocks mentioned herein. We WILL actively trade this stock differently than discussed herein. We will sell into strength and buy or sell anytime for any reason. We will actively trade into any unusual activity. At the time of this post, principals, employees, and affiliates of Shark Investing, Inc. and/or principals, clients, employees, and affiliates of Hammerhead Financial Strategies, LLC, directly or indirectly, controlled investment and/or trading accounts containing positions in OWL. To accommodate the objectives of these investing and/or trading accounts, the trading in these shares will be contrary to and/or inconsistent with the information contained in this posting.
