Deals are picking up even as the Federal Reserve has been backing off on the start of a rate-cut cycle due to persistent inflation. Traders expect rates to stay unchanged during the May 1 meeting. Nonetheless, the spurt in deal making is helping some finance stocks.
Blue Owl Capital broke out from a flat base's buy point of 18.33 but has pulled back to the 50-day moving average, where it is building support. Shares are not far from their all-time high of 19.87. Shares are up 24% year to date, handily beating the S&P 500's gains of 5% in 2024. OWL stock is today's selection for IBD 50 Stocks To Watch
Sales and earnings have grown steadily over the past seven quarters. Sales growth ranged between 16% and 155% over the past eight quarters. Earnings declined 8% in the first quarter of 2022, but have otherwise ranged in growth from 14% to 44% since then.
Shares gapped up on Feb. 9 after sales and earnings accelerated during the fourth quarter, according to IBD MarketSurge. Sales grew 25% to $494 million, while earnings of 18 cents per share rose 20%.
The wealth and investment management company has been on a deal spree. Earlier in April, the company acquired real estate lender Prima Capital Advisors for $170 million. With the acquisition, Blue Owl Capital expanded its investments in commercial mortgage-backed securities.
The company also agreed to acquire Kuvare Insurance Services for $750 million this month. Kuvare provides asset management services to the insurance industry.
Blue Owl has an ideal Composite Rating of 99 and a Relative Strength Rating of 93. However, its EPS Rating of 65 lags, despite a good record of earnings performance.
More funds have also been net buyers of the finance stock in recent weeks, giving the stock an Accumulation/Distribution Rating of A+. The Columbia Acorn Fund (ACRNX) holds shares of Blue Owl.
Exchange traded funds hold the stock as well, including the iShares Russell Mid-Cap ETF.
Please follow VRamakrishnan on X/Twitter for more news on the stock market today.
