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Brookfield Business Corporation Class A Exchangeable Subordinate Voting Shares (BBUC)
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Brookfield Corporation Class A Limited Voting Shares (BN)
Q: Hello,
I have a sense of how you will answer this question but I hope you can elaborate a provide a bit more of your thought process.
Both BN and bbu are “holdcos” and have a holdco discount. Which do you think is cheaper? And if BBU is significantly cheaper why not give that a bit more of a closer look as an investment? Even though BN has the Asset Manager ownership, which is the holly grail (and some ownerships in the other spins and real estate).
I have a sense of how you will answer this question but I hope you can elaborate a provide a bit more of your thought process.
Both BN and bbu are “holdcos” and have a holdco discount. Which do you think is cheaper? And if BBU is significantly cheaper why not give that a bit more of a closer look as an investment? Even though BN has the Asset Manager ownership, which is the holly grail (and some ownerships in the other spins and real estate).
5i Research Answer:
BBUC is cheaper, on a discount basis. But we would consider it decent. It is priced well and has good growth potential. The main offset is high debt. But overall, we would prefer BN for its diversification, and also it is neary 30X as large, providing some safety in size as well as with its ability to deploy huge amounts of capital if we see a recession and changes in target valuations.