With markets now decisively off their most recent highs, uncertainty is rising in markets. We don’t know how long or how deep a market pullback will go. Typically, in the absence of a major crisis, the pullbacks aren’t too bad.
That can give investors an opportunity to buy great companies at more reasonable prices. With earnings season underway, investors can also buy a company after reporting a fresh update on their operations.
One market winner here could be asset manager Blackstone (BX). The company just dropped after earnings, but they did report that their credit trading strategies were generating massive income.
The alternative asset manager has been a long-term winner, and buying shares on pullbacks has typically been a reasonable strategy.
Blackstone is still coming off a rough year as interest rates have peaked. Overall revenues are still down 30%, but improving strategies could mean better returns are ahead for shares.
Action to take: Investors may like a partial stake here, with an eye towards adding more on any further downturn. At current prices, Blackstone pays a 2.7% dividend.
For traders, shares are likely to resume their longer-term uptrend when the market heads higher. The August $135 calls, last trading for about $3.75, could see mid-double-digit returns in the coming months.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.