By Katie Benner
December 20, 2011

FORTUNE — Analysts have taken a shine to Blackstone (BX) of late, collectively predicting that its “stock” (we’ll explain) will rise from its current $14 to $17. Investors should be cautious. The stock has fallen 56% since its debut at the height of the bubble. Yes, Blackstone’s largest revenue stream, its fees for managing assets, are steady and strong. But the fees earned when it sells investments tend to be unpredictable, and a bad economy lowers the paper value of those assets while they’re held, which can hurt the share price.

Because of Blackstone’s master-limited partnership structure, investors own “units” rather than stock. In practice, unit holders have no say on directors, and the company has a minority of independent directors — a red flag. Blackstone’s nearly impenetrable public filings set off warning bells too, and the shares’ structure creates complex tax issues.

By Generally Accepted Accounting Principles the firm has lost hundreds of millions of dollars a year, in part because Blackstone has spread its IPO-related charges over eight years, making it hard to figure out how the company is doing.

Analysts use a calculation called “economic net income.” After ENI of $2.4 billion in 2007, Blackstone plunged to a $1.3 billion loss in 2008, then rebounded to $1.6 billion in ENI last year. The good news is that as long as cash flow is positive, the units pay out a dividend-like distribution. The current yield is 6.9%, based on cash-flow estimates for 2012.

Back to: The triumph of Blackstone on Wall Street

This article is from the December 26, 2011 issue of Fortune.

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