BlackRock Shapes Cup-With-Handle Base
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 ( BLK ).
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 be riskier.
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.