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BlackRock, Inc. (BLK)

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634.99-10.08 (-1.56%)
At close: 4:00PM EDT

634.99 0.00 (0.00%)
After hours: 4:55PM EDT

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Previous close645.07
Bid636.77 x 1100
Ask636.99 x 1800
Day's range634.82 - 653.72
52-week range323.98 - 666.64
Avg. volume614,396
Market cap96.833B
Beta (5Y monthly)1.24
PE ratio (TTM)21.09
EPS (TTM)30.11
Earnings date13 Jan 2021 - 18 Jan 2021
Forward dividend & yield14.52 (2.25%)
Ex-dividend date03 Sep 2020
1y target est707.47
  • Bloomberg

    Invesco, Janus Need Scale to Compete With BlackRock, Peltz Says

    (Bloomberg) -- Investor Nelson Peltz said he believes his newest targets, asset managers Invesco Ltd. and Janus Henderson Group Plc., need to grow and to alter their structures to compete against larger rival BlackRock Inc.Peltz’s Trian Fund Management LP has disclosed three new positions in recent weeks, including two 9.9% stakes in Invesco and Janus. The investment firm also disclosed a stake in Comcast Corp. in September valued at roughly $890 million.Peltz and Trian co-founder Ed Garden are seeking seats on the board of Atlanta-based Invesco, which Peltz said at a conference Wednesday he hoped would happen soon.“These are stable businesses that have some challenges, and we think we’re up to the challenge. I think they need scale and I think that’s going to happen,” Peltz said during the Capitalize for Kids Virtual Investors Conference.“You’re going to see many of these merge, and you’re going to see two or three of them come out similar to what BlackRock looks like,” he added.Representatives for Invesco and Janus weren’t immediately available for comment.It was the first time Peltz discussed his investments in Invesco and Janus publicly. He said he liked both businesses because the asset management sector is out of favor despite the strength of the underlying businesses.They have no environmental risk, they have earnings and cash on the books, and the segments that they operate in are healthy outside of the so-called active equity vertical, where fund managers decide where to invest, he said.Peltz said he had some ideas on how to restructure the active equity business that he’d share with Invesco once he’s on the board. He didn’t delve into what exactly he would like to see, outside of the companies growing bigger through mergers, cutting costs, and potentially some restructuring.“I love this industry. We’ve been in and out of it for close to 15 years,” he said. “I think I’m more excited about this industry and these investments than I have been about anything for a very long time.”Asset managers face increasing pressure to consolidate in response to heightened regulatory costs, increased competition from low-cost index funds and shrinking fees. Merging is one way to combat these issues, which led to the 2017 tie-ups that created Janus Henderson and rival Standard Life Aberdeen Plc.Trian has a track record of taking stakes in companies and agitating for change. The firm’s purchase of a 4.5% stake in Legg Mason Inc. last year -- the second time it invested in the firm -- resulted in a board seat for Peltz. The company was acquired by rival Franklin Resources Inc. in August.Comcast has been under pressure as well to improve returns as it tries to withstand the disruption wrought by online services such as Netflix Inc. Comcast’s struggling NBCUniversal and Sky divisions have been a particular drag on its earnings, prompting calls for the company to split off the entertainment business from its cable assets to improve returns. Peltz didn’t discuss his investment in Comcast at the conference.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • Junk Bonds Won’t Save Everybody From Going Bust

    Junk Bonds Won’t Save Everybody From Going Bust

    (Bloomberg Opinion) -- In April, with the coronavirus pandemic in full swing in the U.S., Texas billionaire Tilman Fertitta had little choice but to turn to the then-frozen leveraged-loan market. He offered a staggering 16% yield to entice investors to extend a lifeline to his empire of Golden Nugget casinos and restaurants such as Bubba Gump Shrimp Co. and Rainforest Cafe. The $300 million loan ultimately priced to yield 14%, a level I called “painful but necessary.”Fast-forward six months to last Friday. That loan rallied more than any other member of the S&P/LSTA Leveraged Loan Index, according to data compiled by Bloomberg, reaching about 113 cents on the dollar for a yield of 5.8%. Now, this isn’t a groundbreaking new level. The loan surged in late June, after Fertitta announced he would merge his Golden Nugget Online Gaming Inc. with Landcadia Holdings II, a publicly traded “blank check” company he created in 2019. Part of that deal included buying back half of the April loan at 116 cents on the dollar. The prospect of expanding in web-based betting and sports wagering is intriguing when state and local governments are strapped and may turn to legalizing online gambling for revenue.Still, I thought of this deal — and the quick and huge return for investors who took the risk when uncertainty was the highest — after seeing the new offerings in the speculative-grade debt markets. It’s worth a reminder that Fertitta’s leveraged loan is still likely to prove the exception, not the norm, during this unusual economic crisis.Consider Dave & Buster’s Entertainment Inc., which faces many of the same issues as brick-and-mortar Golden Nugget casinos. Namely, are people ready to go indoors and drink among a bunch of strangers while gambling or playing arcade games? The company borrowed $550 million through five-year secured notes to get some much-needed cash and relief from lender protections:Proceeds will repay a term loan and revolving credit facility, and be used for general corporate purposes.As part of the transaction, the company is suspending certain maintenance covenants through April 2022, adding a $150 million minimum liquidity covenant and extending the maturity of its revolving credit facility by two years to 2024, according to a news release. Upon closing, the company will have about $299 million in available liquidity.The chain has faced breaching the terms of its $500 million revolving credit facility after pandemic shutdowns sent its revenue plunging. A waiver from lenders was set to expire Nov. 1, and the company has previously warned that it may need to file Chapter 11 to restructure its obligations.The bonds priced to yield 7.625%, down from initial talk in the 8% to 8.25% range. Is that enough, given the explicit bankruptcy risk? Moody's Investors Service rates the notes Caa1, among the lowest grades outside of default, while S&P Global Ratings considers them one step better, at B-. The average yield in the Bloomberg Barclays junk-bond index is 5.28%. The portion of the benchmark rated triple-C yields 9.35%, close to the lowest level since October 2018. Then there’s Ligado Networks LLC, which priced $3.85 billion in debt with a 17.5% coupon in a last-ditch effort to avert a Chapter 11 filing. Not only is that the highest rate for a junk bond since at least 2002, but the company will pay in new debt only, in what’s called payment-in-kind financing. “This restructuring is critical to Ligado’s ability to pursue several paths to improve its credit trajectory, including the development of an organic business model targeting several existing or new end markets,” according to Moody’s. That’s hardly a guarantee the company will find a way to avert insolvency. Overall, credit markets saw several new deals this week from risky, pandemic-plagued companies like United Airlines Holdings Inc. and Sizzling Platter LLC, which operates restaurants including Dunkin’ Donuts, Little Caesars and Red Robin. These borrowers are clearly looking to lock in financing before potential volatility around the U.S. election. Investors should be wary about these shoehorned offerings.There’s no question that this has been a strange crisis. On the one hand, large companies have had no trouble selling bonds at near record-low yield levels, with 2020 investment-grade issuance currently at $1.6 trillion and high yield at $357 billion. Yet there have also been more than 200 bankruptcy filings by businesses with more than $50 million in liabilities, the most since 2009, according to data compiled by Bloomberg.While Chapter 11 cases have steadied in recent weeks after spiking during the summer, it’s an open question whether that will last as the country heads into the coldest months of the year; cases are already starting to surge in states from Vermont to Wisconsin to New Mexico. BlackRock Inc. is among those who say the scale of restructuring across the globe could exceed the previous peak that followed the 2008 financial crisis. “One big reason is the significant growth in sub-investment grade debt,” the BlackRock Investment Institute said in a note this week.The Federal Reserve’s unprecedented foray into credit markets has staved off a worst-case scenario. But that’s not the same as saying vulnerable companies are out of the woods. Dave & Buster’s shares jumped 7.4% on Monday and 8.2% on Tuesday, reaching $18.79, up from as low as $4.61 in mid-March. Some analysts say the new bonds “remove our primary concern and a key overhang.” While liquidity is important, to focus entirely on that seems shortsighted. Philip Brendel, a distressed credit analyst with Bloomberg Intelligence, has a more sobering view of indoor entertainment venues. “Barring Herculean turnarounds, they may just be Chapter 11 filers in ’21 or ’22,” he said. With high-yield spreads back near pre-pandemic levels, investors would be wise to tread carefully. They already pushed back against two junk-bond sales last week. It stands to reason that borrowers should be more keen to sweeten terms in return for locking in funding before Nov. 3. But most important, investors need to remember that speculative-grade companies aren’t immune from going bust, no matter how wide open the debt markets might be. Junk-rated bonds, backed by a business that can’t make it through the pandemic, are just junk.This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Brian Chappatta is a Bloomberg Opinion columnist covering debt markets. He previously covered bonds for Bloomberg News. He is also a CFA charterholder.For more articles like this, please visit us at now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • Swiss Fund’s Independent Future Is Far From Certain

    Swiss Fund’s Independent Future Is Far From Certain

    (Bloomberg Opinion) -- It’s a bit more than a year since BlackRock Inc. veteran Peter Sanderson took the helm at GAM Holding AG as the Swiss fund manager attempted to convince clients to stop pulling money from the scandal-embroiled firm. It may be time for him to revisit his decision to try to restore the company’s reputation alone rather than seek a buyer.More than two years have passed since GAM suspended star fund manager Tim Haywood, the head of its flagship absolute return bond funds, accusing him of gross misconduct. In July 2019, it announced it had reached a truce with Haywood, who in turn said he dropped his unfair dismissal suit because the cost of pursuing it would be higher than any damages he might have received.Even though the firm said that customers trapped in his funds got all of their money back, the year they had to wait for those redemptions dented confidence in GAM. The regulators, who operate on a timescale that might at best be described as glacial, have yet to opine on the matter. Customers, though, continue to desert the asset manager.GAM said on Wednesday that its investment management unit oversaw 33.9 billion Swiss francs ($37.5 billion) at the end of the third quarter. That’s down 30% since the end of last year and 40% lower than it managed at the beginning of 2019.What’s really hurting the firm is its investment acumen — or lack thereof. By the end of September, a staggering 78% of its assets under management had underperformed their respective benchmarks on a three-year basis, continuing a disastrous run that its portfolio managers have suffered throughout this year.While the figures over a longer five-year period are more flattering, with more than two-thirds of GAM’s assets beating their benchmarks, the pandemic has made markets much more volatile this year, producing exactly the kind of environment that should favor active managers. The persistence of outflows shows customers are punishing GAM’s failure to deliver index-beating returns against that backdrop.And there’s a dog that hasn’t barked yet. German banker Joerg Bantleon has a 10% stake in GAM after doubling his investment in July, making him the second-biggest holder after Silchester International Investors LLP. As my Bloomberg News colleague Patrick Winters noted in April, Bantleon’s company website says its policy is to actively engage with the companies it invests in.Last year, GAM held talks with potential buyers including Italian insurer Assicurazioni Generali SpA, Bloomberg News reported at the time. “We looked at these options, but we currently believe that the strategy presented is the best one to add value,” Sanderson told Swiss newspaper Finanz und Wirtschaft in June.  With GAM shares down about 38% this year, worse than many other publicly traded European asset managers, maybe it’s time for Bantleon to start agitating for a change of direction. As the Swiss fund manager continues to shrink, its future as a standalone company in an industry where scale matters more every day looks distinctly perilous.This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Mark Gilbert is a Bloomberg Opinion columnist covering asset management. He previously was the London bureau chief for Bloomberg News. He is also the author of "Complicit: How Greed and Collusion Made the Credit Crisis Unstoppable."For more articles like this, please visit us at now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.