Blackrock Inc., (BLK), with $3.66 trillion assets under management as of June 30, 2011, is the world’s largest and most prominent asset manager. The firm is headquartered in New York City, has offices in more than 26 countries worldwide, and has more than 9,300 employees including more than 700 investment professionals.
Blackrock offers investors worldwide in a variety of investment products, including equity, fixed income, private equity, and real-estate focused products. Within each of those product groups, it offers clients a variety of investment opportunities including individual and institutional separate accounts, mutual funds and pooled investment vehicles such as Hedge Funds. Within the Equity products group, it offers products focused across all capitalization ranging from small- to large-cap equities for both U.S. and Global Equities, including also sector-specific products, region-specific products and index-based products.
Blackrock is a sophisticated institutional investor, leveraging its size and global reach into market insights and expertise that enable it to deliver performance in all market environments. Hence, it is presumed that a study of its top new buys in the latest March 2011 quarter will be informative to the individual investor, and can serve as a starting point for some more diligent research.
The $200 billion Blackrock Advisor fund holds an extremely diversified portfolio of almost 3,800 equity positions, about 50%-55% of that in large caps, 25%-30% in mid caps and the remaining 20% in small-capitalization equities. The portfolio turnover is less than 10%, implying an average holding period of more than ten years. Based on the most recent SEC 13-F filing for the June 2011 quarter, we determined that its portfolio is over-weight in the services (20%), basic materials (7%) and utility (5%) sectors, and it is under-weight energy (11%) and industrial (5%) sectors, compared with the weighting of these sectors in the overall economy. The following summarizes the fund’s most significant picks and pans in the latest reported 13-F filing for the June 2011 quarter, updated based on any 13-G filings since the end of the quarter.
Bullish on Apple Inc. (AAPL): AAPL designs, manufactures and markets personal computers, mobile communication devices, and portable digital music players, and related software, services, peripherals and networking solutions for sale primarily to education, creative, consumer, and business customers. Blackrock opened the position in the 4th quarter of 2009 in the $200 range. It added $32 million to the $2.96 billion prior (March) quarter position in AAPL at substantially higher prices in the $350 range, indicating its conviction in the position. We too are bullish and put out a buy AAPL at the end of June when the stock was trading in the $330s; it is up almost 20% since.
Vale SA Adr (VALE): VALE is a Brazilian company engaged in the mining and exploration of minerals primarily in the north and southeastern parts of Brazil. It is one of the world’s largest producers of iron ore and pellets, and it is also engaged in the mining of manganese, alloys, gold, copper, potassium, and kaolin. Blackrock opened the position in the 4th quarter of 2009 in the mid-$20s range, so cutting a minor $8 million from its $1.2 billion prior quarter position, at substantially higher prices in the low-$30s, is just some profit-taking on the way up and is not that informative.
Taiwan Semiconductor ADR (TSM): TSM is the world's largest dedicated IC foundry manufacturing logic and mixed-signal ICs for fabless semiconductor companies and integrated device manufacturers. Blackrock opened the position in the 4th quarter of 2009 in the $10 range. In the June quarter, Blackrock cut $144 million from its $620 million prior quarter position in the stock, selling at slightly higher prices in the $12-$13 range. While this is probably just profit-taking, it does indicate an erosion of bullishness due to the large size of the position that was sold. We earlier recommended a buy on TSM at the end of last month.
Bearish on Weatherford Intl Ltd (WFT): Geneva, Switzerland-based WFT is a leading provider of equipment and services used in the drilling, evaluation, completion, production and intervention of oil and natural gas wells to independent oil and natural gas producing companies worldwide. It primarily offers artificial lift systems, as well as wellhead systems and production optimization. The company also designs and manufactures drilling jars, rotating control devices, and other pressure-control equipment used in drilling oil and natural gas wells. Blackrock opened the position in the 4th quarter of 2009 in the high-teens to $20. In the June quarter, it cut $92 million from its $150 million prior quarter position, selling in the high-teens to $20 range. Given its typical holding period of ten years, the fact that it sold almost 40% of the position in less than eighteen months is indicative of bearishness on this position.
Bullish on Johnson & Johnson (JNJ): JNJ develops healthcare products and provides related services to the consumer, pharmaceuticals and medical markets. The company's worldwide business is divided into three segments: Consumer; Pharmaceutical; and Professional. Blackrock opened the position in the 4th quarter of 2009 in the low-$60s. In the June quarter, it added a minor $21 million to its $1.34 billion prior quarter position, buying in the low-$60s, indicative of bullishness on this position.
Bullish on AT&T Inc. (T): T provides local exchange, long distance, network access and wireless services in the U.S. and the world. Blackrock opened the position in the 4th quarter of 2009 in the high-$20s. In the June quarter, it added a minor $24 million to the $1.4 billion prior quarter position, buying in the $30 range, indicative of its bullishness on this position.
Procter & Gamble (PG): With more than 250 products marketed to more than five billion consumers in 130 countries, PG is a global manufacturer of beauty care products, cleaning products, diapers, tissues, healthcare, toothpaste, snacks and beverages. It operates via five business segments: fabric and home care, paper, beauty care, healthcare, and food and beverage. Blackrock opened the position in the 4th quarter of 2009 in the $60 range. In the June quarter, they cut a minor $24 million from their $1.26 billion prior quarter position, selling in the mid-$60s.
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Credit: Historical fundamentals including operating metrics and stock ownership information were derived using SEC filings data, I-Metrix® by Edgar Online®, Zacks Investment Research, Thomson Reuters and Briefing.com. The information and data is believed to be accurate, but no guarantees or representations are made.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
Disclaimer: Material presented here is for informational purposes only. Nothing in this article should be taken as a solicitation to purchase or sell securities. Before buying or selling any stock you should do your own research and reach your own conclusion. Further, these are our ‘opinions’ and we may be wrong. We may have positions in securities mentioned in this article. You should take this into consideration before acting on any advice given in this article. If this makes you uncomfortable, then do not listen to our thoughts and opinions. The contents of this article do not take into consideration your individual investment objectives so consult with your own financial adviser before making an investment decision. Investing includes certain risks including loss of principal.