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Brookfield Asset Management CEO Flatt listens to other speakers, during their annual general meeting for shareholders in Toronto on May 10, 2012. Photographer: Brett Gundlock/Reuters (Brett Gundlock/Reuters)
Brookfield Asset Management CEO Flatt listens to other speakers, during their annual general meeting for shareholders in Toronto on May 10, 2012. Photographer: Brett Gundlock/Reuters (Brett Gundlock/Reuters)

Schizas’ Mailbag

Brookfield Asset Management still going strong Add to ...

Hello Lou,

I was wondering your thoughts on BAM. Does this run have legs?

Regards,

Lisa

Hey Lisa,

Thanks for the assignment. Brookfield Asset Management Inc. has $150-billion in assets under management operating in five areas globally. They have $81-billion in property, $26-billion in private equity, $20-billion in infrastructure, $18-billion in renewable energy, and $7-billion in corporate and other activities. CEO Bruce Flatt has proven time and again that his team has what it takes to grow the company in tough times and that’s what seems to lay ahead in the current low growth environment. I’ll never forget that days after the terrorist attack on the World Trade Center in New York Flatt was on the ground to survey the situation and assess the implications for his shareholders. That my friends is the right stuff.

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An inspection of the charts will help measure how much gas is left in the tank at BAM.A and if that will be enough to meet your expectations.

The three-year chart depicts a stock that has taken out the previous high set in late 2010 and has enjoyed great support along the 50-day moving average over the course of the recent advance that started in late 2011. The break above resistance at $29 in January indicated that there was more to the move and the golden cross that formed in February confirmed that momentum was with the longs. From these levels there isn’t very much resistance all the way to the 2007 high of $45. Management intends on spinning out a portion of their real estate unit to shareholders of BAM.A so make sure you add that to your expectations.

The six-month chart is not generating any warning signs that the current trend is about to end. Support along the 50 day moving average has been tested but not aggressively so and the MACD and RSI are not signalling a move to the downside. BAM.A is a long term accumulate so plan on adding to your position on pullbacks.

Make it a profitable day and happy capitalism!

Have your own question for Lou? Send it to lschizas@globeandmail.com.

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