BlackRock continues significant downtrend, institutional shareholder Schwab Charles Investment Management Inc. buys 12 August 2019

NEWS BITES - NORTH AMERICA

BlackRock, Inc. (NYSE:BLK), the NYSE's largest Asset manager company by market cap, has dropped $US9.99 (2.3%) from its previous trading session to close at $US416.34. Compared with the S&P 500 Index which fell 35.6 points (1.2%) in the day, the relative price change was -1.1%. There were 600,430 shares worth $US250 million traded today. The volume was 0.9 times the average daily trading volume of 652,815 shares.

TODAY'S BUZZ

BlackRock Fund's First Big Private-Equity Deal Is a Sign of What's to Come: The Wall Street Journal

BlackRock Takes Stake in Owner of Sports Illustrated, Nine West: The Wall Street Journal

News DateHeadlinePublisher
Aug 12BlackRock christens new P-E fund with Authentic Brands stakeSeeking Alpha

BULLISH TURNING POINT

Dividend Yield increases to 3.09%

Based on dividends of $US12.86 per share for the trailing twelve months and the last price of $US416.34 the dividend yield is 3.09%, an improvement from 3.02% on the previous day.

Stock Summary

Today's close (USD)416.34
52-Week Range (USD)355.3-483.7
SectorAsset Managers sector
Shares Outstanding154,500,000
Market Cap$US64.3 billion

Highlights in today's Report:

SECTION 1 TODAY'S BEARISH SIGNALS

SECTION 2 TODAY'S BULLISH SIGNALS

RECAP FROM PREVIOUS REPORTS (UPDATED AT THE LAST PRICE OF $US416.34):

SECTION 3 THE PAST WEEK

SECTION 4 ONGOING BULLISH PARAMETERS

SECTION 5 ONGOING BEARISH PARAMETERS

SECTION 6 REPORTED BUYING AND SELLING

SECTION 7 SUMMARY FINANCIALS

SECTION 8 CORPORATE PROFILE

SECTION 1 BLACKROCK BEARISH SIGNALS

1.1 Overvaluation [compared with sector average]:

Price/Earnings

+ Price/Earnings of 15.5 [13.2]. We estimate BlackRock stock is trading at a current year P/E of 12.3 and a forward year P/E of 10.1.

Price to Sales

+ Price/Sales of 4.5 [3.0].

Price to Book

+ Price to Book of 29.6 [3.1].

1.2 Overvaluation Indicator and rank of BlackRock in the NYSE market:

DescriptionValueRank In Market
P/E * P/NTA458.33In Bottom 1%

1.3 Short Selling:

+ The current short volume is 1.1 times its own historical average of 0.1%.

1.4 Downtrend:

+ Increasing Put Call Ratio

+ Put Call Contracts

The Put/Call ratio has jumped from 0.144 to 0.228 suggesting a downtrend.

Put ContractsCall ContractsPut/Call ratio
Today7373,2370.228
Previous day4202,9230.144

Today's Volatility:

+ BlackRock drops 2.3% on high volatility: Today its volatility (highest price minus lowest price/lowest price) of 2.8% was 1.4 times the average daily volatility of 2.0%, up from 2.2% on Friday and 1.6% on Thursday. A fall in the price on high volatility is a bearish signal.

Price/Moving Average Price and MACD:

+ The Price/MAP of 0.97 for BLK is lower than the Price/MAP for the S&P 500 Index of 1.04.

+ The Moving Average Convergence Divergence (MACD) indicator of 12-day Exponential Moving Average (EMA) of 442.7 minus the 26-day EMA of 453.67 is negative suggesting a bearish signal. Both the 12-day EMA as well as the 26-day EMA are falling, another bearish signal.

+ The price to 50-day EMAP ratio is 0.9, a bearish indicator. The 50-day EMAP has decreased to $US455.69. A decrease is another bearish indicator.

+ In the past 200 days this ratio has been under 0.97, 92 times suggesting downside.

Past Week:

+ BlackRock, Inc. is placed 2270/2736 in BuySellSignals' ranking of NYSE performers in the past week, a percentile ranking of 17.

+ In the past week, volume was 0.8 times average and the shares were down 3.5%. Monday's close price is at a 2.8% discount to its 5-day Volume Weighted Average Price (VWAP) of $US428.48.

Past Month:

+ The present value of $US1,000 (PV1000) invested one month ago in BlackRock is $US876, for a capital loss of $US124.

Slipping Relative Strength (1mo, 3 mo):

+ In the NYSE market of 1,879 stocks and 287 units traded today, the stock has a 6-month relative strength of 48 which means it has underperformed 52.0% of the market.

+ Also, the relative strength percentile is slipping at 30 for 3 months and 19 for 1 month.

1.5 Low Price Performance Indicator and rank of BlackRock in the NYSE market:

DescriptionBLK ValueRank In Market
Price/MAP500.91In Bottom Quartile

SECTION 2 BLACKROCK BULLISH SIGNALS

2.1 Undervaluation [compared with sector average]:

Earnings Yield

+ Earnings yield of 6.5% is 3.7 times the 10-year bond yield of 1.75%.

+ The earnings yield of 6.5% has a spread of 4.7% vs the 10-year treasury yield of 1.7%. This is the widest and most attractive spread in the past year.

Dividend Yield

+ To quote Benjamin Graham: "A dividend yield of at least two-thirds the triple-A bond yield"; the stock's dividend yield is 1.8 times the triple-A bond yield of 1.7%.

+ The relative yield of BLK, defined by its yield of 3.1%, divided by average yield of dividend yielding stocks in the S&P 500 Index of 1.7% is 183.9%. This suggests BlackRock stock is undervalued in dividend yield terms.

MCap/Total Assets

+ Tobin's Q Ratio, defined as MCap divided by Total Assets, is 0.4. Compared with the rest of the market the stock is undervalued and ranks in the top quartile of stock by value of Q Ratio.

Brand Value/Enterprise Value

+ Brandirectory have estimated BlackRock's brand value at $US2.7 billion. The Brand Value represents 3.9% of the estimated Enterprise Value of $US69.4 billion. Enterprise Value is defined as MCap of $US64.3 billion plus net debt of $US5.1 billion.

2.2 Undervaluation Indicator and rank of BlackRock in the NYSE market:

DescriptionValueRank In Market
Cash to MCap %39.1In Top 3%

2.3 Uptrend:

Price/Moving Average Price:

+ The price to 200-day MAP ratio is 0.97.

2.4 High Price Performance Indicators and rank of BlackRock in the NYSE market:

DescriptionBLK ValueRank In Market
MCap$US64.3 billionIn Top 5%
Today's Trading Turnover$US250 millionIn Top 6%

Oversold/Bullish Signals:

+ The Relative Strength Index (RSI) of 17.3 has breached the oversold line of 30, suggesting the price decrease of 17.3% in the last 14 days is unusually high.

+ The stock is oversold according to the Williams % R indicator of -97.2, suggesting the price is close to its 14-day low of $US414.46.

RECAP FROM PREVIOUS REPORTS (UPDATED AT THE LAST PRICE OF $US416.34):

SECTION 3 THE PAST WEEK

3.1 Snapshot: BlackRock stock was down $US14.98 or 3.5% in the past week. Volume in the week was 0.8 times average trading of 3.3 million shares. It underperformed the S&P 500 index in 5 out of 5 days.

DayBlackRockClose price [USD]Price change %Relative change %Comment
FridayLoses $US908.5 million in MCap426.33-2.6-1.9Price fall on falling relative strength
ThursdayRises 2.3% from 14-day low437.621.7-0.2Top Rise
WednesdayLoses $US1.8 billion in MCap430.39-1.2-1.3Price fall on falling relative strength
TuesdayAdds $US692.2 million in MCap435.711.0-0.3Price/PMAP200 above 1 and rising
MondayLoses $US1.5 billion in MCap431.32-3.8-0.8Steepest Fall

3.2 Stock Buzz: Past Week

News DateHeadlinePublisher
Aug 07Northwest Investment Counselors LLC Purchases 96 Shares of BlackRock, Inc. (NYSE:BLK)Dispatch Tribunal
Aug 06NEXT Financial Group Inc Increases Stake in BlackRock, Inc. (NYSE:BLK)theenterpriseleader.com

3.3 Volatility:

+ BlackRock is at a discount of 13.9% to its 12-month high of $US483.75 on May 01. It is also at a premium of 17.2% to the 12-month low of $US355.35 on December 24, 2018.

SECTION 4 ONGOING BULLISH PARAMETERS

4.1 Performance:

+ Return on Equity 12.8% [10.2%].

+ Return on Assets 2.7% [1.8%].

+ Return on Capital Employed 15.1% [4.1%].

+ Net profit margin has averaged 31.8% in the last 3 years. This is considered superior and suggests a high margin of safety.

+ As per the Du Pont analysis, Return on Equity [ROE] of 12.8% is better than sector average of 10.2%. ROE is computed as net profit margin of 30.3% times asset turnover [sales/assets] of 0.09 times leverage factor [total assets/shareholders' equity] of 4.8.

4.2 Low Debt Indicators:

+ The debt to equity ratio of 15.1% is under a safe benchmark figure of 50%. Moreover, it has improved in the past four years.

DescriptionValueRank In Market
Debt to Equity0.2In Top Quartile

4.3 High Performance Indicator and rank of BlackRock in the NYSE market:

DescriptionValueRank In Market
EBITDA Margin %38.2In Top Quartile

4.4 Moving Annual Return (Past 5 years)

Based on a dynamic start date of 5 years ago, the real rate of return has averaged 11.1%. The Moving Annual Return has been positive in 4 out of 5 years.

BLKClose (USD)Dividends (USD)Capital Gain / (Loss) %% YieldAnnual Return %
Aug 12416.3412.86(10.5)2.8(7.7)
1 Yr ago465.0510.7612.22.614.8
2 Yrs ago414.369.5817.72.720.5
3 Yrs ago351.928.9412.72.915.5
4 Yrs ago312.328.229.72.912.6

Close 5 years ago $US284.66

4.5 Increased ADVT past five years

Avg. Daily Volume Traded 12 months ended Aug 12, thousand shares

YearADVT
2019652.8
2018551.2
2017572.0
2016737.4
2015530.1

In the past five years, Average Daily Volume of Trading (ADVT) has increased 23.1% to 652,815 shares.

4.6 Increased VWAP

Past five years, 12 months ended Aug 12 (USD)

YearHigh PriceVWAPLow Price
2019483.75425.49355.35
2018571.12490.29392.54
2017425.4368.74321.55
2016358.88313.23258.82
2015358.57327.48274.51

In the past five years Volume Weighted Average Price (VWAP) has increased by 29.9% to $US425.49. Based on a dynamic start date of five years ago, there have been declines in VWAP in 2 out of 5 years.

4.7 Increased Average Daily Turnover

Past five years, 12 months ended Aug 12 (USD million)

YearAverage Daily Turnover
2019276.9
2018271.3
2017211.8
2016233.8
2015175.0

In the past five years, average daily share turnover has increased 58.2% to $US276.9 million. This suggests increased liquidity.

SECTION 5 ONGOING BEARISH PARAMETERS

5.1 High Debt Indicators:

+ Total Liabilities/EBITDA of 23.2 compares unfavourably with the Joseph Piotroski benchmark of 5.

5.2 Past 5 years Annual Net Profit growth:

Annual ReportNet Profit (B $US)Growth %
20184.3-13.1
20174.9556.1
20163.17-5.2
20153.351.5
20143.2912.3

Average Annual Compounded rate of growth in Net Profit for the 5 years was 8.0%. There have been three rises and two declines in the past 5 years.

5.3 Increase in Insider Selling

In the past 5 years a total of 1,053,846 BlackRock shares worth $US384.7 million were sold by insiders. Based on a dynamic start date of 5 years ago, insider selling has averaged 210,769 shares per year. In the past year, insiders sold 149,173 shares, an increase of 376.2% from the previous year.

SECTION 6 BLACKROCK REPORTED BUYING AND SELLING

6.1 Institutional Buying and Selling Quarter Ended March 31

Total reported Institutional buying = 3,236,189 shares

Total reported Institutional selling = 4,115,726 shares

Net reported institutional selling = 879,537 shares

6.2 Reported Holdings of Institutions as at Mar 31, 2019

Total = 115,561,096 shares

Market Value = $US49 billion

Institutions hold 74.8% of Issued Shares.

SECTION 7 BLACKROCK SUMMARY FINANCIALS

7.1 Dividend History

Trailing 12 months dividend for the 12 months ended August 12 has improved from $US8.22 in 2015 to $US12.86 in 2019; there were no declines in the past 5 years. Dividends were up 19.5% for the 12 months ended August 12 from $US10.76 in 2018 to $US12.86 in 2019.

7.2 Financials Summary

Year endedDec 2018Dec 2017Dec 2016
Sales (USD B)14.213.611.2
Pretax (USD B)5.45.34.5
Net (USD B)4.353.2
EPS (USD)26.8630.54-

+ Net profit was down 13.1% from US$5 billion in 2017 to US$4.3 billion in 2018.

+ Earnings Per Share (EPS) was down 12% from $US30.54 to $US26.86.

7.3 Quarterly Report: Key Parameters

Quarterly Report Q1 2019: BlackRock reports Net Profit of $US1.1b

BlackRock (NYSE:BLK) announced net profit for the quarter-ended 31 March 2019 of $US1.1b.

Quarter-ended31 Mar [Q1/2019]31 Dec [Q4/2018]30 Sep [Q3/2018]
Revenue$US933m$US575m$US747m
Sequential growth in Revenue %--23.01-
Net Profit-$US-7.2m$US7.7m

Compared with the previous corresponding period [PCP; Q1/2018], year-over-year [y.o.y.] Revenue was up 11.2%.

Quarter-ended31 Mar [Q1/2019]31 Mar [Q1/2018]
Revenue$US933m$US839m
PCP growth in Revenue %11.1722.58
Net Profit-$US142m
PCP growth in Net Profit %-7.03

7.4 Annual Report: Key Parameters

FY2018 Annual Report: BlackRock Net Profit down 13.1%

BlackRock (NYSE:BLK) reported net profit for the year-ended 31 December 2018 of $US4.3b, down 13.1% from $US5.0b in the previous year.

Major changes compared with previous year:

Favourable Changes:

- Total revenue up 4.4% from $US13.6b to $US14.2b

- EBIT to total assets up from 2.4% to 3.4%

- Sales and marketing expenses to Revenues down from 31.3% to 30.4%

- Debt to Equity down 6.3% from 0.2 to 0.1

- Working capital to total assets up from 0.7% to 0.9%

- Retained earnings to total assets up from 7.5% to 11.7%

- Total non-current assets to Total Assets up from 14.9% to 21.4%

- Other non-current assets to Total Assets up from 0.7% to 1.3%

- Net tangible assets per share up 33.4% from $US10.07 to $US13.43

Unfavourable Changes:

- Net profit down 13.1% from $US5.0b to $US4.3b

- EPS down 12% from $US30.54 to $US26.86

- EBIT Margin down from 38.7% to 37.9%

- Administration expenses to Revenues up from 10.6% to 11.5%

- Total current assets to Total Assets down from 85.1% to 78.6%

- Total Liabilities to EBITDA of 23.2 compares unfavourably with the Joseph Piotroski benchmark of <5. However, it has improved by 33.9% from the previous year's ratio of 35.1.

- Total Liabilities to Operating Cash Flow of 41.0 compares unfavourably with the Joseph Piotroski benchmark of <4. However, it has improved by 13.9% from the previous year's ratio of 47.6.

Note:

- Profit before tax to Revenues down from 38.7% to 37.9%

- Tax expenses to Revenues up from 2% to 7.6%

- Amortisation to Revenues down from 0.7% to 0.4%

- Total liabilities to Total assets steady at 0.8

- Intangibles to Total Assets up from 13.9% to 19.7%

- Short-term investments to Total Assets up from 12.6% to 15.7%

Annual Report [Year-on-year comparison: 2018 vs 2017]

Company Name : BlackRock, Inc. (BLK)
December 3120182017Change
Description$US m$US m(%)
Total Revenue14,19813,600Up 4.4
EBITDA5,4285,348Up 1.5
Amortisation5089Down 43.8
EBIT5,3785,259Up 2.3
Pre-Tax Profit/(Loss)5,3785,259Up 2.3
Profit/(Loss) after Tax4,3054,952Down 13.1
Working Capital1,3921,580Down 11.9
Current Assets125,437187,404Down 33.1
Current Liabilities124,045185,824Down 33.2
Shareholders' Funds33,54032,264Up 4
Total Liabilities126,033187,977Down 33
Total Assets159,573220,241Down 27.5
Current Debt5,0635,014Up 1
Total Debt5,0635,014Up 1
Operating Cash Flow3,0753,950Down 22.2
Net Assets33,54032,264Up 4
Net Tangible Assets2,1751,655Up 31.4
AuditorDeloitte & Touche LLP 

Year-on-year comparison of Per Share figures

December 3120182017Change (%)
Description$US $US
EBIT33.532.4Up 3.4
EBITDA33.933Up 2.7
Cash195.2211.1Down 7.5
Working Capital8.79.7Down 10.9
Shareholders' Funds209.2199Up 5.2
Total Liabilities786.21,159.2Down 32.2
Total Assets995.51,358.2Down 26.7
Current Debt31.630.9Up 2.1
Total Debt31.630.9Up 2.1
Net Tangible Assets13.410.1Up 33.4
EPS Final26.930.5Down 12
    EPS Growth Factor*1.08  

* EPS Growth Factor = Net Profit growth / EPS growth

Year-on-year comparison of Performance Ratios

December 3120182017Change (%)
Return on Equity (%)12.815.5Down 17.4
Return on Assets (%)2.72.3Up 17.4
Total debt to net tangible assets (%)232.8303Down 23.2
Total Liabilities to EBITDA23.235.1Down 33.9
Total Liabilities to Operating Cash Flow4147.6Down 13.9
Debt/Equity0.10.2Down 6.3
Total Liabilities/Total Assets (Down 7.1% from 0.85 to 0.79)0.80.8Down 7.1
Common Size Ratios by Assets %
Total current assets to Total Assets 78.6 85.1 Down 7.6
Total non-current assets to Total Assets 21.4 14.9 Up 43.5
Intangibles to Total Assets 19.7 13.9 Up 41.7
Short-term investments to Total Assets 15.7 12.6 Up 25.0
Other non-current assets to Total Assets 1.3 0.7 Up 75.0
Common Size Ratios by Revenues %
Profit before tax to Revenues 37.9 38.7 Down 2.0
Sales and marketing expenses to Revenues 30.4 31.3 Down 2.8
Administration expenses to Revenues 11.5 10.6 Up 8.2
Tax expenses to Revenues 7.6 2.0 Up 282.8
Amortisation to Revenues 0.4 0.7 Down 38.9

Five-year record of growth and performance:

In the last 5 years Total Revenue averaged $US12.4B, EBITDA averaged $US5.1B and Net Profit averaged $US3.8B. Compound Annual Growth Rate (CAGR) averaged 6.9% for Total Revenue, 8.0% for Net Profit and 3.7% for EBITDA.

DescriptionAnnual ($US B)5-year Avg ($US B)5-year CAGR %
Total Revenue14.212.46.9
EBITDA5.45.13.7
Operating Profit5.44.95.1
Net Profit4.33.88

Five-year record of EBITDA, Operating Profit, Net Profit, ROE and ROA

In 2018 Net Profit Margin of 30.3% was below its 5-year Avg of 31.1% (All Figures in %)

Description20185-year Avg
EBITDA Margin38.242.4
Operating Profit Margin37.940.8
Net Profit Margin30.331.1
Return on Equity12.812.6
Return on Assets2.71.9

SECTION 8 CORPORATE PROFILE

8.1 Activities

BlackRock, Inc. (BlackRock) operates as an investment management firm in the United States. BlackRock provides diversified investment management services to institutional clients and to individual investors through various investment vehicles. Its investment management services primarily consist of the active management of fixed income, cash management and equity client accounts; the management of a number of open-end and closed-end mutual fund families, and other non-United States equivalent retail products serving the institutional and retail markets, and the management of alternative funds developed to serve various customer needs. In addition, BlackRock provides market risk management, financial markets advisory and enterprise investment system services to a broad base of clients.

8.2 Top Management

The chief executive officer and chairman is Laurence D. Fink and the chief financial officer is Gary S. Shedlin

Laurence D. Fink was ranked 39 in the Harvard Business Review's list of 100 Best-Performing CEO's in the world.

8.3 Issued Capital and MCap

Based on 154,500,000 issued shares the market capitalisation is $US64.3 billion.

8.4 Vanguard Total World Stock ETF 7701:

The stock was one of 7701 global stocks selected by Vanguard Total World Stock ETF (VT) who sold 877 shares in the period May 31, 2019 to Jun 30, 2019 worth $US-391,879 at an estimated Volume Weighted Average Price (VWAP) of $US446.8399. As at Jun 30, 2019, the Vanguard Total World Stock ETF held 39,251 shares worth $US17,538,913 or 0.1% by value of the ETF's portfolio [Ranked 154 out of 7701 by value and 71 out of 1092 for NYSE].

COMPANY IDENTIFIERS

Contact: +1 212 810-5300

Physical Address: 55 East 52nd Street, New York, NY,10055

State/Province/Country: NY [NY], United States

Country of Incorporation: United States

Industry [NAICS]: 523120

Exchange: New York Stock Exchange

Business Sector: Banking & Investment Services

Industry Group: Diversified Financial Services

Economic Sector: Financials

ISIN: US09247X1019

N:BLK; BLK.N

PermID: 4295900990

RIC: BLK.N

CIK: 1364742

CUSIP: 09247X101

Blackrock Inc, Blackrock, Inc

Source: www.BuySellSignals.com