Hype Stock of the Day - BlackRock Inc
Asset managers have remained strong despite the stock and crypto market facing massive volatility over the past 12-24 months. And at the forefront of this sector lies BlackRock Inc (BLK). A long-time favorite of investors and analysts, BlackRock has managed to grow steadily, beating out earnings estimates for 8 years running. Currently, the share price of BlackRock is around $756 down 18.3% YTD. However, BlackRock has achieved a HypeIndex increase of 174%, making it one of February’s most hyped stocks.
Positive:
BlackRock Inc already manages a staggering $10 billion worth of client assets, making it the largest investment management company in the world. Despite this, they are looking to dip their toes into the crypto market by allowing investors to trade crypto-assets and use their cryptocurrency as collateral for loans. With the cryptocurrency market worth between $1.5 to $3 trillion, the number of assets under BlackRock’s control substantially.
On February 7th, BlackRock made a statement of ownership filing with the SEC, stating that they owned 6,121,980 shares of a 6.3% stake in Asana, a software specialist.
ETFs are one of the most popular asset classes in the world, with investors typically putting more cash in them as they’re seen as low-risk assets. BlackRock has a wide range of ETFs for clients to invest in, helping to steadily increase the number of assets they manage.
Speaking of ETFs, BlackRock has announced plans to launch the iShares Blockchain and Tech ETF. This will likely draw crypto-fond investors into the BlackRock ecosystem.
Seemingly, BlackRock believes in cryptocurrency and Bitcoin with the company owning a 16.3% stake in MicroStrategy, a company famed for its BTC holdings. With cryptocurrency growing rapidly and slowly getting adopted by nations, this bet could pay off big time for BlackRock.
With Pinterest shares dropping by 70% over the past 12 months, both BlackRock and Vanguard Group acquired large stakes in Pinterest, the image-sharing social media platform. The power of marketing using Pinterest is slowly becoming more widespread and with two prominent investors, hopefully, we’ll soon see a turnaround in the share price of Pinterest.
Negative:
Despite posting a 14% growth rate over the past 12 months, BlackRock still missed analyst expectations by $40 million. Although it's true this is a small amount in the grand scheme of things, it marks the first time in 10 quarters that BlackRock has missed expectations, not a great sign for investors.
Currently, BlackRock has around a 42.2% payout ratio. While this number is reasonable, analysts are expecting it to grow around 45.9% should BlackRock meet forecasted earnings. While this is sustainable for the time being, a company doesn’t want its dividend payout ratio too high as it can cause the company to have limited cash on hand.
Hype Stock of the Day Conclusion
Right now, BlackRock is one of the most hype stocks, and for good reason. It’s already performing extremely well in the investment management sector, and with expansion to the cryptocurrency market underway, it’s likely BlackRock will be in charge of substantially more assets than they are at current. This, of course, will cause BlackRock to further dominate, in turn, increasing the company's share price. The hype doesn’t lie, with a HypeIndex increase of 175%, it could be a great time to buy BlackRock stock before prices increase due to its recent acquisitions and upcoming endeavors.
HypeIndex is an AI platform that detects Hype in stocks and cryptos before it moves the market, providing reliable early detection for profitable investment opportunities.
The algorithm for our proprietary HypeIndex score is based on sentiment analysis, data science and machine learning.