close icon

Brookfield Partners and the Risk Climb in Tandem

Brookfield Infrastructure Partners L.P. operates cash flow-generative assets in the fields of transportation, energy, utilities and communications. The company went public in January 2008, just in time for the Financial Crisis. By March 2009, the stock was down over 67% from its IPO price to as low as $4.77.

Over 10 years later today, BIP is hovering above $44 and is close to its all-time high of $46.88 reached in late-2017. Brookfield Partners would have delivered a pretty decent 826% return to anybody, who had the courage and the luck to buy the 2009 bottom. Add the dividends to the calculation and the result gets even better.

The last decade brought many growth stories similar to this one. No wonder buy-and-hold strategies are so popular among investors nowadays. The problem is that this strategy usually gets the most attention after a huge price increase. Unfortunately, “today’s investor does not profit from yesterday’s growth.”

Buying at the wrong time of the market cycle can significantly alter your returns, even if you are in for the very long term. So instead of buying in the 11th year of Brookfield Partners’ rally, let’s first see if the bulls can indeed be trusted.

Brookfield Partners set to complete Elliott Wave impulse pattern

The weekly chart above puts BIP’s entire surge since 2009 into Elliott Wave context. In our opinion, there is no reason for optimism. It seems the stock is currently drawing the final fifth wave of a larger five-wave impulse, labeled 1-2-3-4-5.

As Brookfield Partners Stock Rises, Risks Rise, Too

Fifth waves usually exceed the end of the third wave, so it makes sense to expect a new high near $50 a share soon. On the other hand, the theory states that every impulse is followed by a three-wave correction in the opposite direction.

This means that instead of throwing a party to celebrate the new record, investors should be very careful. If this count is correct, the anticipated three-wave retracement can drag BIP stock back to the support area of wave 4 near $32. Maybe lower. Even if it is just on paper, a 40% loss still hurts. To avoid the pain, we think investors should stay away from Brookfield Partners stock for now.

Did you like this analysis? Similar Elliott Wave setups occur in the Forex, crypto and commodity markets, as well. Our Elliott Wave Video Course can teach you how to uncover them yourself!

Stay informed with our newsletter

Latest Elliott Wave analysis on different topics delivered to you weekly.

Privacy policy
You may also like:

Can Facebook ‘s Antitrust Concerns Fulfill this Setup?

This article was originally published on June 13th, 2019.  It was updated on August 7th, 2019. Facebook ‘s privacy policies are under the microscope once again. Personal e-mails uncovered during an FTC investigation reveal Mark Zuckerberg knew of the company’s problematic privacy practices. Escalating antitrust concerns are not helping the bulls’ cause, either. Facebook stock still hasn’t been able to fully…

Read More »

Apple Stock is Crashing. How Low Can It Go This Time?

The market didn’t even give Apple stock time to fully recovery from its 2018 collapse. The shares are down by over 12.6% in just four trading days after trade war and antitrust fears spooked investors. One of the best investment strategies is all about buying high quality companies when their stock price is down. Apple…

Read More »

Pandora ‘s Jewelry Hasn’t Lost Its Shine

According to Pandora A/S’ 2017 annual report, the Copenhagen-based company is the “leader in the affordable jewelry segment and the largest producer of jewelry worldwide in terms of pieces crafted.” That leading position paired with double digit average earnings growth in recent years convinced many investors the company was a one-way ticket to riches. So, they…

Read More »

MSCI Stock – Great Business, but a Bad Investment

MSCI stock was barely holding above $11 a share in November 2008. Earlier this month it reached an all-time high of $247.57. This 2140% return in less than 11 years, not counting the dividends, makes MSCI one of this bull market’s best performers. Anyone who had the insight to buy MSCI stock during the past…

Read More »

iRobot Stock Can Fall Much Lower This Time

iRobot Corporation really does manufacture robots, but don’t picture them anything like in an Isaac Asimov book. Founded in 1990, the company makes robot vacuum cleaners, mops and pool cleaners. It has a market cap of roughly $2.5 billion, down from ~$3.8B in March. Since the bottom of the Financial Crisis in 2009, iRobot stock…

Read More »

ROKU Is the Very Definition of a Bubble Stock

Roku Inc. is a TV streaming platform operator with over 27 million active accounts as of the end of 2018. The company held it IPO in September 2017 and is approaching its second birthday as a public company. Unfortunately, Roku has been a money-losing company for years. Yet, it has a market cap of over…

Read More »

GTX Stock May Recover, but Remains Under Pressure

With a market cap of just over $1B, Garrett Motion Inc. is still considered a small company. Founded less than two years ago in Rolle, Switzerland, the company provides electric-boosting technologies for light and commercial vehicle manufacturers. In September 2018, GTX stock started trading on the NYSE. It was hovering in the vicinity of $20…

Read More »

More analyses