Bank of New York Mellon Corp has reduced its holdings in BlackRock (NYSE: BLK) by 1.4% during the third quarter of 2023. According to a recent filing with the Securities and Exchange Commission, the firm now owns 1,030,344 shares of the asset management company after selling 14,170 shares during this period. This reduction positions Bank of New York Mellon’s stake in BlackRock at approximately 0.67%, valued at around $1.2 billion.
Several other hedge funds have also made adjustments to their investments in BlackRock. For instance, Westerkirk Capital Inc. acquired a new position valued at approximately $2.88 million during the second quarter. Meanwhile, the Police and Firemen’s Retirement System of New Jersey increased its stake in BlackRock by 7.9%, now holding 23,167 shares valued at $24.31 million after acquiring an additional 1,693 shares.
Investment Research & Advisory Group Inc. also made headlines by purchasing a new stake in BlackRock valued at $6.2 million. The California Public Employees Retirement System boosted its holdings by 8.2%, now owning 256,937 shares worth $269.59 million. Liberty One Investment Management LLC also grew its position by 29.3% in the third quarter, increasing its ownership to 6,748 shares valued at $7.87 million. Collectively, hedge funds and institutional investors own approximately 80.69% of BlackRock’s stock.
Recent Developments Affecting BlackRock
Several key developments are influencing BlackRock’s market position. The company recently appointed Gregg R. Lemkau, Co-CEO of BDT & MSD Partners, as an independent director. This addition is expected to enhance BlackRock’s governance and strengthen its relationships within the industry. Analysts view this move positively, as it brings significant market experience to the board.
Moreover, BlackRock’s Chief Investment Officer of Fixed Income, Rick Rieder, has gained attention as a potential candidate for the role of Federal Reserve Chair. This speculation amplifies BlackRock’s profile in the fixed income market, potentially benefiting its asset-gathering strategies.
In terms of product innovation, BlackRock has filed for a new bitcoin exchange-traded fund (ETF) featuring a covered-call strategy. This initiative showcases the firm’s commitment to expanding its crypto offerings, aiming to attract additional investment flows and generate fee revenue.
However, not all news has been favorable. A private credit fund associated with BlackRock reported a significant markdown of approximately 20% in net asset value, affecting market sentiment regarding BlackRock’s exposure to private credit. Ongoing scrutiny in this sector may raise concerns about asset valuations and future earnings.
BlackRock’s Financial Performance and Stock Analysis
As of the latest trading session, BlackRock shares opened at $1,106.19, with a market capitalization of $171.63 billion. The company reported earnings per share of $13.16 for the last quarter, surpassing the consensus estimate of $12.55. Although revenue reached $6.33 billion, it fell short of analysts’ expectations of $6.80 billion. Compared to the previous year, revenue increased by 23.4%.
BlackRock announced a quarterly dividend of $5.73 per share, payable on March 24, 2024, to shareholders recorded by March 6, 2024. This marks an increase from the prior quarterly dividend of $5.21, reflecting a commitment to returning capital to shareholders. The dividend yield now stands at 2.1%, with a payout ratio of 58.84%.
In insider trading news, Chief Financial Officer Martin Small sold 27,047 shares at an average price of $1,171.14, amounting to a total transaction value of $31.68 million. Following this sale, Small retained a stake of 10,557 shares valued at approximately $12.36 million. Additionally, Director J. Richard Kushel sold 20,000 shares for a total of $22.5 million. In total, company insiders sold 48,305 shares worth $55.49 million in the last quarter.
Several financial analysts have recently updated their ratings for BlackRock. Barclays raised its price target to $1,350.00 from $1,300.00, maintaining an “overweight” rating. In contrast, TD Cowen downgraded the stock from “buy” to “hold,” while JPMorgan Chase set a new price target of $1,267.00. Morgan Stanley increased its price objective to $1,550.00, further emphasizing the mixed sentiment among analysts regarding BlackRock’s future performance.
BlackRock remains a formidable player in the investment management sector, known for its extensive range of products and services. The firm’s core activities encompass portfolio management, exchange-traded funds under the iShares brand, fixed income, equity, and multi-asset solutions. Its proprietary Aladdin platform combines risk analytics and portfolio management, solidifying BlackRock’s reputation for technological innovation in the financial space.
