Another example, consider a company like Brookfield Corporation, whose stock market symbol is BN. The giant asset management company's shares have fallen by 20% over the past year, and have just reached their lowest level in 52 weeks.
Its distributable earnings, which are not earnings according to Generally Accepted Accounting Principles (GAAP) but rather a form of adjusted earnings, rose by 15% year-on-year in the last quarter.
Its fee-paying capital grew by 19 % year-on-year, a strong indicator of future revenues . It is raising funds at a faster pace than ever before. This is a situation where the business continues to grow, but the stock price is low due to market concerns.
There are some real risks with Brookfield , don't get me wrong. But the company, at a price of 15 times earnings, creates a remarkable risk-reward dynamic.