Fundamental Analysis
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Reasons to buy – BLACKROCK
High level decisions on buy or sell for a stock should be driven by
1. The margin that the company makes. i.e. Out of $1 that the company sells how much does the company taken home.
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- Here we see BLACKROCK makes a margin of 38% on Gross Level and about 30% on Net level This means that out of $1 that it makes $0.11 is being pocketed as profits.
2. The growth rates of the company on revenue, net income, EPS and Dividend. i.e. If it sold $1 last year how much more did it sell this year.
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- Here we see net revenue growth of 16% in the revenue and the net profit figures grew by 26%. Note the Dividends have increases by 15% which is a sign that the company is willing to give back cash to the shareholders.
3. The efficiency ratios of the company on Equity and Assets. i.e. How well is the company able to sweat each $1 that it puts to work in the company.
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- Here we see BLACKROCK makes a Return on Assets of 2% and Return of Equity of 14% which is pretty good. Note that since this is a stock from the Financial space, the Assets will be financial assets and will be huge. Hence the Return on Assets of over 1.5% in this case is a great performance.
GOLD STANDARD : This is one of the no-debate stocks that are a must have in ones portfolio.
All these ratios can be found in the attached excel sheets and are based on the EDGAR report submitted by BLACKROCK to the SEC. All the data on the above analysis can be found at the link below
Balance Sheet
Income Statement
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