Click to Enlarge While Treasury yields have dropped somewhat since their highs in late June, they’re still significantly higher than they have been for some time, and this trading environment seems to be all about anticipation of rising interest rates in the future.
As my colleague John Jagerson explained last week, one of the major areas that will benefit from such a change is brokerages and investment firms. The one I have my eye on for a trade is Carlyle Group (CG), a $1.3 billion alternative investment firm focused on private equity, structured credit, distressed credit and equity, hedge funds and funds of funds. It’s basically a mini version of Blackstone Group (BX), though it is by no means an inferior firm.
Shares of many of its peers, including SEI Investments Company (SEIC) and State Street Corp. (STT), are trading near highs and so should CG after a rocky June attributable to its credit portfolio. A word to the wise, though–the company reports earnings on Aug. 7, so we could see some volatility.
Recommendation: Buy CG at $28.50 limit with a target of $32.50.
InvestorPlace advisor Jon Markman operates the investment firm Markman Capital Insight. He also writes a daily swing trading newsletter, Trader’s Advantage, which aims to capture profits of 15% to 40% and often as much as 100% to 200% in less than 90 days.
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