While leading stocks in bases are tougher to come by, they are
still out there. One top-rated name that's in a base is BlackRock
The stock is in a cup-with-handle pattern with a 288.92 buy
point. On the plus side, BlackRock's base is a second-stage
structure. Generally, first- or second-stage bases are preferable
over third- or fourth-stage patterns. Latter-stage bases tend to
BlackRock's handle formed in bone-dry volume, which is a good
sign that big investors didn't bail on the stock. BlackRock has
climbed for the past five or six weeks, with two of those gains
in above-average trade.
If a stock is going to move up, it needs institutional
sponsorship, which BlackRock has. At the end of the second
quarter, 1,517 mutual funds owned shares of the money manager, up
from 1,289 three quarters before that. Leading funds such as
Fidelity's Contrafund and Magellan , as well as CGM Focus , owned
BlackRock shares at the end of June.
BlackRock has delivered rising earnings each year since 2009.
It has a three-year
Earnings Stability Factor
of 4, indicating a rock-steady stream of income.
Last month, the company reported Q2 earnings that jumped 34%
to $4.15 a share -- the biggest gains since the final quarter of
2010. Despite investors pulling money out of
bond funds in droves
, BlackRock saw a net inflow of $11.9 billion.
The company currently pays a quarterly dividend of $1.68 a
share, which was last boosted in January. It pays $6.72 a share
on an annual basis, which works out to a yield of about 2.4%.
That's one of the lowest yields among the 72 companies that pay
dividends in the Finance-Investment Management group. But it is
one of the highest-rated in terms of IBD SmartSelect ratings.