Wednesday, November 20, 2013

Charts tell the story

This chart shows Total Return, the only thing that matters in an IRA.  Charts were going OK until they dropped that $0.75 dividend on us last February.
Ozm hit another new high and an s/a article came out today.  Ozm is the fifth largest hedge fund firm and one of the fastest growing with a compound annual growth rate of approximately 19% over the last 11 years.
This is the deal with management companies, assets under management, not how much they make in the markets each year.  The Hedge Fund they manage has returned more than double the S&P 500 while taking less than a third of the risk.  Like Kmr the LLC pays out nearly all its income to shareholders.  The dividend pays 7.7%.  Quarterly distributions are considered a return of capital, not interest or dividend income, which means a K-1s and tax advantages.

I only went with these guys because of my interest in the Investment Counsel business which I understand, and my belief that the management companies prayed upon Investors and Private Bankers.  Risk of dilution is high as OZM could sell new shares of stock and use shares to pay help.

These charts tell the story

This chart shows the current jump in P/E ratios that is causing the rise.
Investors are pissed off at them because they diluted the shares to pay off debt a few years ago.  This shows in a low P/E ratio.   Och-Ziff reckons this distributable-earnings figure is a more accurate gauge of its performance than Earnings per share.
Using a dividend discount valuation methodology off of Bloomberg (above) intrinsic value looks to be approximately $17.50 per share, or about 34% higher than the current price.

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