Stock (Symbol) |
BlackRock (BLK) |
Stock Price |
$521 |
Sector |
| Financial |
Data is as of |
| February 13, 2018 |
Expected to Report |
| Jan 11 |
Company Description |
 BlackRock, Inc. (BlackRock) is an independent investment management firm. Its product range includes single- and multi-asset class portfolios investing in equities, fixed income, alternatives and/or money market instruments. Source: Thomson Financial |
Sharek’s Take |
 BlackRock (BLK), the world’s largest asset manager, is perfectly positioned for today’s investments. The world continues to appreciate (and invest in) ETFs and Index funds, which are passive investments. So BlackRok has responded by overhauling its stock-picking business in an effort that has included layoffs, pricing changes and a greater emphasis on computer models that inform investments. This shift into computer modeling is lowering expenses and fees — which investors appreciate. Half the net inflows last qtr went into iShares ETFs. In asset style, BlackRock assets are evenly divided between active management, index funds, and ETFs — which means 2/3rds of assets are passive investments. Half of assets under management are in stocks, a qtr are in bonds and the remainder in multi-assets, alternatives and cash. BLK is an excellent stock. It’s safe, has a yield of 2% and possesses an Estimated Long-Term Growth Rate of 17% per year. Management bought back $1.1 billion in stock in 2017 and could buy more this year with the tax savings. They also just raised the dividend from $10 to $11.52 annually. In its earnings call last qtr management mentioned it sees a 23% tax rate for 2018, vs. 31% in 2017. Analysts took this figure and increased 2018 profit estimates from $25.43 last qtr to $28.57 this qtr. So 2018’s profit growth rate estimate surged from 13% to 27%. That’s gotten me very excited about this stock! BLK surged after earnings, and has since come down a bit in a weak market. With a P/E, of 18 this stock is a solid value. BLK is part of the Conservative Growth Portfolio and I will add it to the Growth Portfolio and Aggressive Growth Portfolio today. |
One Year Chart |
 BLK reported impressive revenue growth of 20% last qtr. Wow! This is a big asset manager pumping out 20% sales growth. Profit growth was 21% and beat estimates of 16%. Qtrly profit growth Estimates surged and are now 35%, 31%, 24% and 25%. And with a P/E of 18 this stock is quite a value. |
Fair Value |
 My Fair Value on BlackRock is 23x earnings, which honestly might be too low. But with the P/E now 18 I don’t want to be pie-in-the-sky and put out a 25 P/E. Even with a 23 P/E there’s excellent upside for this stock both this year and next. |
Bottom Line |
 BlackRock has been an on-and-off holding of mine going back more than a decade. After its IPO in 1999 it surged from $15 to $200, based for five years, then went on another run from $200 to where it is today. Notice bottom/right the yearly profit growth is higher than the stock growth. These two numbers should be similar. Thus I think the stock will climb until these numbers come in-line. BLK ranks 1st in the Conservative Growth Portfolio Power Rankings. I will add it to Growth Portfolio and Aggressive Growth Portfolio where it will rank 10th in the Power Rankings. |
Power Rankings |
Growth Stock Portfolio
10 of 40Aggressive Growth Portfolio 10 of 17Conservative Stock Portfolio 2 of 32 |
