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Brookfield Asset Management still a long-term accumulate
schizas’ mailbag
Lou Schizas
Special to The Globe and Mail

This article was published more than 8 years ago. Some information may no longer be current.

Hi Lou,

BAM.A and BIP.UN are trading on the TSX. Which one would you prefer? Both have pulled back a little bit. Is it good time to buy?

Thanks.

Tat from Calgary

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Hey Tat,

Thanks for the assignment. I will inspect Brookfield Asset Management Inc. (BAM.A-T) today and Brookfield Infrastructure Partnerships L.P (BIP.UN-T) in my next column.This will be the second time that I examine the case for BAM.A. The first was on Aug. 15, 2012 on a request from Lisa. The shares were trading for $34.57 and the research indicated that the stock was enjoying a move higher with support along the 50-day moving average.

The golden cross that formed in February of 2012 indicating that buyers were in control of the market was also added to the evaluation. In addition it was cited that there was no significant resistance until the 2007 high near $45. The evidence at hand led to a long term accumulate recommendation.

As things developed, that was the right call. The stock continued to move higher plus shareholders captured the spinoff of shares in Brookfield Property Partners L.P. (BPY.UN-T) in 2013.

A probe of the charts will begin the comparative analysis of the two stocks which you can add to your evaluation.

Desktop users click on image to enlarge

The three-year chart should be framed and hung in a place of honour. Make note that the chart reflects the 3-for-2 stock split that was concluded in May. The split announcement in early April saw the stock pulling back and testing support near $42. As the stock retested support at $42 for the third time in June, it caught a bounce that carried it through resistance along the 50-day moving average.

Desktop users click on image to enlarge

The moving average convergence divergence (MACD) and the relative strength index (RSI) on the six-month chart signalled the buy in mid June as BAM.A bounced off the third retest of support. The next question that we need answered is if the shares can get through resistance at $46.

From the research conducted on your behalf, I would reaffirm my 2012 recommendation of a long-term accumulation.

Next time, I will conclude the comparative analysis with an inspection of Brookfield Infrastructure Partnerships L.P (BIP.UN TSX).

Make it a profitable day and happy capitalism!

Have your own question for Lou? Send it to lou@happycapitalism.com.