In this article we will analyze whether BlackRock, Inc. (NYSE:BLK) is a good investment right now by following the lead of some of the best investors in the world and piggybacking their ideas. There’s no better way to get these firms’ immense resources and analytical capabilities working for us than to follow their lead into their best ideas. While not all of these picks will be winners, our research shows that these picks historically outperformed the market by double digits annually.
BlackRock, Inc. (NYSE:BLK) has seen a decrease in enthusiasm from smart money lately. BlackRock, Inc. (NYSE:BLK) was in 44 hedge funds’ portfolios at the end of September. The all time high for this statistic is 53. Our calculations also showed that BLK isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings).
Tom Gayner of Markel Gayner Asset Management
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so we go through lists like the 10 best EV stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. Now we’re going to take a glance at the key hedge fund action encompassing BlackRock, Inc. (NYSE:BLK).
Do Hedge Funds Think BLK Is A Good Stock To Buy Now?
Heading into the fourth quarter of 2021, a total of 44 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -6% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in BLK over the last 25 quarters. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Citadel Investment Group was the largest shareholder of BlackRock, Inc. (NYSE:BLK), with a stake worth $264.8 million reported as of the end of September. Trailing Citadel Investment Group was AQR Capital Management, which amassed a stake valued at $230.9 million. Markel Gayner Asset Management, Adage Capital Management, and Fisher Asset Management were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Ivy Lane Capital allocated the biggest weight to BlackRock, Inc. (NYSE:BLK), around 12.59% of its 13F portfolio. Heard Capital is also relatively very bullish on the stock, dishing out 7.63 percent of its 13F equity portfolio to BLK.
Due to the fact that BlackRock, Inc. (NYSE:BLK) has witnessed a decline in interest from hedge fund managers, it’s safe to say that there was a specific group of fund managers that decided to sell off their entire stakes by the end of the third quarter. Interestingly, James Parsons’s Junto Capital Management cut the largest position of the “upper crust” of funds monitored by Insider Monkey, valued at close to $121.1 million in stock, and Andrew Sandler’s Sandler Capital Management was right behind this move, as the fund dumped about $6.7 million worth. These moves are intriguing to say the least, as aggregate hedge fund interest dropped by 3 funds by the end of the third quarter.
Let’s now take a look at hedge fund activity in other stocks similar to BlackRock, Inc. (NYSE:BLK). We will take a look at Goldman Sachs Group, Inc. (NYSE:GS), TotalEnergies SE (NYSE:TTE), Advanced Micro Devices, Inc. (NASDAQ:AMD), International Business Machines Corp. (NYSE:IBM), ServiceNow Inc (NYSE:NOW), Sanofi (NYSE:SNY), and American Tower Corporation (NYSE:AMT). This group of stocks’ market caps are closest to BLK’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| GS | 74 | 5451988 | 13 |
| TTE | 16 | 1398818 | 1 |
| AMD | 65 | 5254017 | 2 |
| IBM | 41 | 1405372 | 0 |
| NOW | 87 | 7527653 | -4 |
| SNY | 19 | 1287779 | 3 |
| AMT | 61 | 4474779 | 6 |
| Average | 51.9 | 3828629 | 3 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 51.9 hedge funds with bullish positions and the average amount invested in these stocks was $3829 million. That figure was $1085 million in BLK’s case. ServiceNow Inc (NYSE:NOW) is the most popular stock in this table. On the other hand TotalEnergies SE (NYSE:TTE) is the least popular one with only 16 bullish hedge fund positions. BlackRock, Inc. (NYSE:BLK) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for BLK is 46.6. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 28.6% in 2021 through November 30th and still beat the market by 5.6 percentage points. A small number of hedge funds were also right about betting on BLK as the stock returned 7.9% since the end of the third quarter (through 11/30) and outperformed the market by an even larger margin.
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Disclosure: None. This article was originally published at Insider Monkey.
