Equal Weight - Price 8.66 on May 5
by Barclays Capital

1Q09 earnings per share came in a penny above expectations at 7 cents, primarily due to lower...expenses. OZM increased 72% YTD, outperforming a flat Standard & Poor's 500 index, primarily reflecting ability to generate incentive income in 2010; slowing redemptions; and attractive investing opportunities. We view OZM shares as pricey, currently trading at an '09 price/earnings ratio of 47 times, against peers' [average] at 33 times. We believe OZM is already pricing in a market recovery and normalized environment, essentially discounting 2010 earnings, on which basis the shares look inexpensive...[that] could be a little optimistic...[yet] we view OZM as a solid asset manager. Market cap: $702 million.

Och-Ziff Capital (OZM) was downgraded to Neutral from Buy, Goldman said. In lieu of more aggressive view of finance names, see greater upside at other asset managers. Note recent weak fund performance and $0.5 billion in outflows during March. Price target at $23.

Ooch-Ziff Capital Management has not done well and should be difficult to gain because of the credit crisis. Although the hedge fund is considered nimble the stock price has not been an indicator of future performance and hence will not benefit from any profitable quarters.

"Compared with other money-management firms, Och-Ziff looks quite overpriced. And that would hold true even if its stock were five to 10 points below its current price."