Worldwide Sites: United States | Canada | South Africa

Free Weekly Email
Enter Email Address:

Stock Research


Symbol Lookup

Free Research

Blog

Rating Changes

Articles

Stock Ideas

Hot List

Model Portfolios

Guru Screener

Adv. Guru Screener

Top Industries

Stock Analysis

Guru Analysis

Stock Tracker

My Portfolio

Validea Professional

Trade Alerts

Pro Portfolios

Stock Reports

About Us

Introduction

Videos

Help

About John Reese

Guru Investor Book

Press Room

Featured Gurus

Warren Buffett

Benjamin Graham

Peter Lynch

Joel Greenblatt

Martin Zweig

David Dreman

John Neff

Kenneth Fisher

Joseph Piotroski

Gurus by Style

Value Stocks

Growth Stocks

Dividend Stocks

Growth/Value Stocks

Customer Service

Refer a Friend
Enter Email:

Rating Change Detail - BLACKROCK, INC. (BLK) - 3/7/2013
The stock was upgraded from Some Interest to Strong Interest on 3/7/2013 by the P/E/Growth Investor Strategy based on the principles of Peter Lynch. The score according to this strategy rose from 81% to 91%. A full detailed analysis of BLK using this strategy is included below. For a full detailed analysis of BLK using 12 proven strategies of Wall Street Legends, take a free trial to Validea.com

Detailed Analysis of BLACKROCK, INC. (BLK)

Strategy: P/E/Growth Investor - Based on: Peter Lynch

DETERMINE THE CLASSIFICATION:

This methodology would consider BLK a "fast-grower".

P/E/GROWTH RATIO: [PASS]

The investor should examine the P/E (18.15) relative to the growth rate (22.79%), based on the average of the 3, 4 and 5 year historical eps growth rates, for a company. This is a quick way of determining the fairness of the price. In this particular case, the P/E/G ratio for BLK (0.80) makes it favorable.

SALES AND P/E RATIO: [PASS]

For companies with sales greater than $1 billion, this methodology likes to see that the P/E ratio remain below 40. Large companies can have a difficult time maintaining a growth high enough to support a P/E above this threshold. BLK, whose sales are $9,337.0 million, needs to have a P/E below 40 to pass this criterion. BLK's P/E of (18.15) is considered acceptable.

EPS GROWTH RATE: [PASS]

This methodology favors companies that have several years of fast earnings growth, as these companies have a proven formula for growth that in many cases can continue many more years. This methodology likes to see earnings growth in the range of 20% to 50%, as earnings growth over 50% may be unsustainable. The EPS growth rate for BLK is 22.8%, based on the average of the 3, 4 and 5 year historical eps growth rates, which is considered very good.

TOTAL DEBT/EQUITY RATIO: [NEUTRAL]

BLK is a financial company so debt to equity rules are not applied to determine the company's financial soundness.

EQUITY/ASSETS RATIO: [PASS]

This methodology uses the Equity/Assets Ratio as a way to determine a financial intermediary's health, as it is a better measure than the Debt/Equity Ratio. BLK's Equity/Assets ratio (13.00%) is healthy and above the minimum 5% this methodology looks for, thus passing the criterion.

RETURN ON ASSETS: [PASS]

This methodology uses Return on Assets as a way to measure a financial intermediary's profitability. BLK's ROA (1.28%) is above the minimum 1% that this methodology looks for, thus passing the criterion.

FREE CASH FLOW: [NEUTRAL]

The Free Cash Flow/Price ratio, though not a requirement, is considered a bonus if it is above 35%. A positive Cash Flow (the higher the better) separates a wonderfully reliable investment from a shaky one. This methodology prefers not to invest in companies that rely heavily on capital spending. This ratio for BLK (2.32%) is too low to add to the attractiveness of the stock. Keep in mind, however, that it does not adversely affect the company as it is a bonus criteria.

NET CASH POSITION: [NEUTRAL]

Another bonus for a company is having a Net Cash/Price ratio above 30%. Lynch defines net cash as cash and marketable securities minus long term debt. According to this methodology, a high value for this ratio dramatically cuts down on the risk of the security. The Net Cash/Price ratio for BLK (-1.80%) is too low to add to the attractiveness of this company. Keep in mind, however, that it does not adversely affect the company as it is a bonus criteria.

For a full detailed analysis of BLK using 12 proven strategies of Wall Street Legends,
take a free trial to Validea.com

Rating Change Detail - BLACKROCK, INC. (BLK) - 3/7/2013

Detailed Analysis of BLACKROCK, INC. (BLK)

Strategy: P/E/Growth Investor - Based on: Peter Lynch