Log in
Forgot password ?
Become a member for free
Sign up
Sign up
Dynamic quotes 

4-Traders Homepage  >  Equities  >  Nyse  >  Blackstone Group LP    BX

News SummaryMost relevantAll newsSector newsTweets 

IPO OUTLOOK: Carlyle's Big Name May Not Generate Big Gains

share with twitter share with LinkedIn share with facebook
share via e-mail
04/27/2012 | 10:41pm CEST

--Analysts don't expect a meaningful first-day pop from Carlyle

--Its competitors, like Apollo and Blackstone, remain below their IPO prices

--Teen retailer Tilly's is main offering of interest this coming week

   By Lynn Cowan 

A big, high-profile company is slated to come public this coming week, with private equity firm The Carlyle Group L.P. planning to launch its IPO on Thursday.

What's not expected is a big, high-profile pop for the stock. In fact, investors are more likely to take an interest in the initial public offering of small retail clothing chain Tilly's Inc. a day later, though that won't stop a likely media frenzy over everything Carlyle, a storied name on Wall Street.

Founded in Washington in 1987, it bills itself as an alternative asset manager with the greatest presence around the world and in emerging markets. It has $147 billion in assets under management, owns stakes in more than 200 portfolio companies, and operates 89 funds and 52 funds-of-funds across six continents.

The problem with Carlyle for IPO investors isn't its size or its reputation, it's that the company is in an industry that has repeatedly failed to deliver decent stock gains after launching IPOs. Peers like Blackstone Group L.P. (>> The Blackstone Group L.P.) and Apollo Global Management LLC (>> Apollo Global Management LLC) are still trading below their IPO prices set in 2007 and March 2011, respectively. Carlyle, during its marketing road show over the past week, has been making the case that it isn't like the others but analysts say they aren't convinced.

"They are trying to present themselves as a company that's different than Apollo and Blackstone. People still don't seem to think that the leopard has changed its spots, though," said John Fitzgibbon, president of research firm IPOScoop.com.

The deal "will likely perform very much like all the others prior," concurred Scott Sweet, managing director of research firm IPOBoutique.com. "They are saying they are different in many ways, but the fact is, they are very similar."

One major issue for investors in asset managers like Carlyle is that their interests can conflict with the firms' clients: the people who invest in private equity funds. Like debt asset manager Oaktree Capital Group LLC (OAK), which declined on its first day of trading earlier this month, Carlyle warns that its first priority is to the interests of its fund investors, and it could make decisions that would reduce revenue in the short term, such as limiting the assets under management that it oversees or reducing management fees.

Carlyle's economic net income, a non-GAAP measure used in the asset management industry as a way to track core operating performance, declined 18% to $833.1 million in 2011.

So while Carlyle's deal grabs the headlines, the only offering "worth a hoot" out of the five scheduled to price next week is the teen and young-adult retailer, Tilly's, according to Sweet. The company, which sells what it calls "West Coast inspired" clothing and accessories, including its own brands and national brands like Billabong and Hurley, wants to raise $108 million by listing as TLYS on the New York Stock Exchange.

It operates 140 stores in 14 states, but is concentrated in California. It plans to expand its list of stores, all of which are leased, from 140 locations to 500 in the next 10 years, adding at least 21 net new stores in fiscal 2012, which ends in January.

In fiscal 2011, which ended Jan. 28, net sales rose 20% to $401 million, and net income rose 41% to $34 million, compared with fiscal 2010. Comparable store sales increased 10.7%.

There are three other offerings expected this coming week: online lender EverBank Financial Corp., propylene producer PetroLogistics L.P., and Supernus Pharmaceuticals Inc. Investors hoping for a strong pop from this trio should probably look elsewhere.

EverBank Financial Corp., seeking $353 million on the NYSE as EVER, is receiving slightly higher marks than the other two from analysts. The bank, which primarily services its 575,000 customers online, says its deposit customers are typically mass-affluent people--a category it defines as individuals with more than $250,000 in net worth--as well as small and medium-sized businesses.

But EverBank says in its prospectus that origination and servicing of residential mortgages is a "significant" component of its business. As a mortgage lender, EverBank faces regulatory challenges related to foreclosure practices in the industry.

In 2011, the company's total interest income declined by 4% to $588 million, primarily due to a decrease in interest earned from its investment securities portfolio. Higher noninterest expenses, such as salaries, equipment and administrative costs, pulled the company's bottom line lower, and it reported net income of $53 million, down 72% from a year earlier. Many of the higher costs were related to acquisitions the company made.

Propylene producer PetroLogistics is seeking to raise $735 million on the NYSE as PDH. The company processes propane into propylene, a petrochemical used in a variety of products, ranging from building materials to consumer products.

PetroLogistics says it is enjoying the wider price spreads between low natural gas prices, from which propane is derived, and high oil prices, which are related to higher propylene prices.

The company, which began operating its facility in 2010, currently has multiyear contracts for the sale of its propylene with a range of major chemical companies, including Dow Chemical Company (DOW) and Total SA's (TOT) Total Petrochemicals USA Inc. In 2011, it reported sales of $615 million and net income of $22 million, compared to sales of $30 million and a loss of $40 million in 2010.

A leftover from last week is also on the calendar, trying to get done this week. Unprofitable, early-stage drug developer Supernus Pharmaceuticals Inc. has lowered its sights to $5 a share from its original range of $12 to $14, and is now seeking to raise $29 million on the Nasdaq as SUPN.

-By Lynn Cowan; 202-257-2740; [email protected]

Stocks mentioned in the article : The Blackstone Group L.P., Apollo Global Management LLC
share with twitter share with LinkedIn share with facebook
share via e-mail
05:37a BLACKSTONE LP : Casino Security Might Want To Think Twice About Roughing Up Hedg..
04/26 BLACKSTONE LP : Tony James Accused Of Making Money While Making Money
04/25 BLACKSTONE LP : Mortgage Trust Reports First Quarter 2017 Results
04/25 NEW LOCATION FOR VISUAL JAZZ : Chor Boogie in La Jolla.
04/20 BLACKSTONE LP : Group tops Street 1Q forecasts
04/20 BLACKSTONE LP : Reports First Quarter 2017 Results
04/20 THE BLACKSTONE GROUP L.P. (NYSE : BX*) Files An 8-K Results of Operations and Fi..
04/20 BLACKSTONE GROUP L.P. : Results of Operations and Financial Condition, Financial..
04/17 BLACKSTONE LP : to buy EagleClaw Midstream for about $2 billion
More news
Sector news : Investment Management
04/28 Symphony adds large asset management clients in chat tool push
04/28 UBS : U.S. wealth business sees profits rise on client activity, lower recruitin..
04/28 Strongest week since December for European shares as investors pile in
04/28DJBLACKROCK : Fink Voices Concerns With Trump Tax Plan -- Update
04/28 KKR-backed group halts work on Tatts takeover offer
More sector news : Investment Management
News from SeekingAlpha
04/27 Zeta Global Raises $140 Million For Acquisitions
04/27 Wingstop Over B-Dubs - Cramer's Lightning Round (4/26/17)
04/25 Share Buybacks Would Be A 'Nail-In-The Coffin' For Blackstone Group
04/24 Schwarzman Isn't That Wrong
04/24 Blackstone Is A Buy - Cramer's Lightning Round (4/21/2017)
Financials ($)
Sales 2017 6 606 M
EBIT 2017 3 416 M
Net income 2017 3 225 M
Debt 2017 -
Yield 2017 7,81%
P/E ratio 2017 11,13
P/E ratio 2018 10,18
Capi. / Sales 2017 5,59x
Capi. / Sales 2018 5,15x
Capitalization 36 902 M
More Financials
Duration : Period :
Blackstone Group LP Technical Analysis Chart | BX | US09253U1088 | 4-Traders
Full-screen chart
Technical analysis trends BLACKSTONE GROUP LP
Short TermMid-TermLong Term
Technical analysis
Income Statement Evolution
More Financials
Mean consensus OUTPERFORM
Number of Analysts 14
Average target price 34,9 $
Spread / Average Target 13%
Consensus details
EPS Revisions
More Estimates Revisions
Stephen Allen Schwarzman Chairman & Chief Executive Officer
Hamilton Evans James President, Chief Operating Officer & Director
Michael S. Chae Chief Financial Officer & Senior Managing Director
Jay A. Leek Chief Information Security Officer & Senior VP
William Murphy Chief Technology Officer & Senior MD
More about the company
Sector and Competitors
1st jan.Capitalization (M$)
LEGAL & GENERAL GROUP ..-0.61%18 974
T. ROWE PRICE GROUP IN..-5.81%17 014
KKR & CO. L.P.23.33%15 105
AMUNDI S.A.25.06%13 281
More Results