Alex A.C.
Value/GARP Investor, Semiconductor & Financial Analysis, Electronics MEng
Brookfield can triple and still be a bad investment because its valuation is too high. Even compounding at the 24% annual rate @InvestInAssets cites, it trades at a P/E of 90 against a recent historic range of 7 to 15, and its EPS has swung up and down rather than climbing steadily over 14 years, which does not justify a stable high multiple. x.comÂ
Brookfield Corporation's accounts look like pure book cooking. It pays premium prices for acquisitions and then sets its own valuations on the assets once it owns them, so results that seem fine on the surface do not hold up on closer inspection. x.comÂ
Brookfield Corporation is not enticing near current valuations because of its accounting practices, of which office real estate is only the tip of the iceberg. @NickNemo17 notes Brookfield uses IFRS fair value for investment properties, so depreciation mostly disappears and investors must trust management's marks; before BPY was taken private it showed $321M of depreciation against about $100B of real estate. x.comÂ
Brookfield may be one of the safest undervalued stocks around, with a realistic path to triple over the next five years if execution stays strong. Its mix of infrastructure, power, asset management and long-duration capital makes it a boring business with huge upside rather than a lottery ticket. x.comÂ
The Brookfield ecosystem looks increasingly attractive long term, pairing Brookfield Asset Management's asset-light fee machine with Brookfield Renewable's exposure to the enormous power and infrastructure buildout. Westinghouse adds another potentially powerful growth engine tied to the nuclear renaissance. Brookfield has consistently allocated capital well across cycles, and its scale and access to capital create a formidable moat. x.comÂ
Broadcom's great earnings don't matter much at a P/E of 93 and forward P/E of 37. Valuation is the problem, and Broadcom, like a lot of others, needs a 20%+ pullback. x.comÂ
Brookfield stands to benefit from sustained demand for clean energy, AI data centers needing power it can build and finance, and companies turning to private credit as banks lend less. Its Oaktree holding provides exposure to that lending demand. Bill Ackman calls Brookfield an AI winner; despite the uncertainty, Brookfield remains highly attractive. x.comÂ
Broadcom looks overpriced at 83x trailing and 48x forward earnings and 29x sales, and could correct sharply if markets hit a 20% mid-term drawdown. Its strength is real: it acts like a high-end hedge fund, acquiring and operating only in leading tech themes and consistently landing on the right side of history. x.comÂ
FICO's moat is starting to get disrupted, and the premium multiple holders once defended has not held up. Two years ago the stock traded at 80x EPS on the argument that a high-quality compounder with a moat deserved it; that multiple has since compressed by about 80%. FICO would need to rise 280% to regain its all-time high, and there is a good chance it never does. x.com x.com x.comÂ
Brookfield has one of the most underrated AI angles. It committed $100 billion to build a new AI cloud business and already has the permits, power and land in place. It trades at 16x distributable earnings while guiding for 20% annual growth through 2030. Its CEO calls AI the utility of the future, embedded in daily life without people noticing. x.comÂ
Costco's premium multiple looks unsustainable, at 40 times next-twelve-month earnings with EPS growing only about 10%. Stocks with PEG ratios like that are not worth owning, as multiple cuts at former compounders such as FICO and Intuitive Surgical showed. x.com x.comÂ
