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BlackRock: Bulge bracket investment manager

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Mar. 3 2015, Published 2:10 p.m. ET

BlackRock’s strong growth

BlackRock, Inc. (BLK) has become the world’s largest asset manager in the span of just two decades. The company is managing $4.65 trillion in assets for governments, sovereign wealth funds, institutions, and retail clientele. It manages assets through various product offerings such as portfolio investing equities, fixed income, alternatives, and money market instruments across global markets and asset classes.

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4Q14 results beat estimates

In the fourth quarter of 2014, BlackRock beat analysts’ estimates with record fund inflows and control of operating expenses. BlackRock is leveraging on its scale and breadth of investments, backed by its strong technology platform, Aladdin.

According to Thomson Reuters I/B/E/S, BlackRock reported EPS (earnings per share) of $4.82, beating analysts’ average estimate of $4.68. Revenues increased marginally when compared to the fourth quarter of the previous year due to the introduction of low-cost ETFs in US and European markets.

Operating margins increased substantially due to strict discipline and the control of the company’s administrative expenses. Overall, EPS grew by 17% in 2014 to $19.34 compared to 2013.

BlackRock witnessed good inflows in long-term assets under management, especially in the ETFs category. Its results are expected to be better than competitors such as BNY Mellon Asset Management (BK), State Street (STT), Franklin Resources (BEN), T. Rowe Price Group (TROW), and Vanguard. Together, they make up 4.09% of the Financial Select Sector SPDR Fund (XLF).

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