The stock’s chart has all the signs of a major move up in the making. A “golden cross” was established in late December, when the 20-day and 50-day moving averages sliced up through the 200-day moving average, as evidenced in the chart below.
Shares are consolidating in a sideways pattern, but I expect the next move to be higher based on positive forward guidance and the prospect of further big distribution payments like the most recent.
Now, there is no way of telling how much Och-Ziff is going to pay going forward. Understand that going into this trade. I’m in because I think they intend to keep the big payouts coming, and I think the stock is telling us that also.
The money flow back into hedge funds is for real, and firms like Och-Ziff Capital stand to benefit from a strong wave of rising management and performance fees. A rising tide floats all boats, and those firms that employ an extra measure of risk management tend to capture the larger capital commitments when big money rotates to the “risk-on” trade.
High-yield investors are fortunate enough to have a vehicle with which to share in the spoils of this lucrative environment for companies like Och-Ziff. I have a feeling it will surprise to the upside in the next couple of quarters.