As the world’s largest asset manager with nearly $10 trillion in assets under management, BlackRock (NYSE:BLK) holds tremendous influence in financial markets. Yet the company itself remains somewhat mysterious to everyday investors. I’ve always found BlackRock intriguing due to its immense size and impact across the investing world. There’s no doubt BlackRock sits as the sage among Wall Street firms when it comes to navigating market trends.
Since its founding in 1988, BlackRock has leveraged its expertise to deliver consistent, market-beating returns across various asset classes. So, when BlackRock goes shopping for new growth stock opportunities, my ears naturally perk up. If any firm can identify the next generation of high-flying stocks primed for gains, BlackRock has the resources and know-how to do it. Let’s look at three such growth stocks worth investor consideration.
Rockwell Automation (ROK)
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Rockwell Automation (NYSE:ROK) is one of the largest robotics companies, and if you’ve read my articles in recent weeks, you’ll know that I am heavily bullish on robotics stocks and related AI stocks. While software AI companies are likely to face a cooldown due to the AI hype starting to dry up and there being no profitability in sight, industrial robotics companies are seeing organic growth and profit growth, as blue-collar jobs have become more and more in demand. I believe this will ultimately lead to significant growth in the long-run for companies like Rockwell.
As one of the largest industrial robotics and automation companies, Rockwell has much to gain from the increasing demand for automation and robotics. With skilled labor shortages and rising wages, companies are looking to automation to improve efficiency.
Rockwell already enjoys a strong competitive position with over $9 billion in annual revenue and leadership across diverse industries. However, the accelerating pace of automation adoption provides a substantial runway for growth. Thus, it makes sense that BlackRock increased its position in ROK stock by around $96 million (according to the company’s current share price).
Spirit AeroSystems (SPR)
Spirit AeroSystems (NYSE:SPR) is a riskier bet, but is definitely a very intriguing investment. This is an aerostructures manufacturing company that tumbled when the pandemic hit, and is yet to recover to previous levels. Spirit has recently undergone a 90% recovery from its trough, but the stock remains around 60% off its peak. I believe this is quite the discount, since the company’s financials have turned a corner, and the stock is already rallying very quickly.
Substantial upside potential lies ahead in the commercial aviation space, as activity recovers steadily. Accordingly, Wall Street expects Spirit’s revenue to recover past pre-pandemic levels by 2024. Currently, Spirit trades at just 13-times 2025 earnings estimates.
I think SPR stock could soar higher if the company’s financial performance improves per expectations. However, I will note that Spirit has underwhelmed when it comes to earnings, and despite beating earnings per share estimates by 7% in the latest quarter, it has missed by substantial margins in the past. However, even if we add an extra year to these expectations, the stock still appears very undervalued to me. BlackRock’s $23 million position boost in this stock is notable.
NET Power (NPWR)
NET Power (NYSE:NPWR) has developed a novel combustion-based system that generates electricity from natural gas while producing zero atmospheric emissions. As global energy systems migrate towards renewable sources, NET Power has incredible potential, as companies look to cost-effectively retrofit existing plants in a bid to reduce their carbon footprints.
BlackRock has not added many growth stocks to its portfolios, and has dialed back its risk profile, much like other hedge funds. However, it appears BlackRock sees a lot of upside potential with NPWR stock. This is a pre-revenue company that has been in quite a lot of trouble. Thus, it’s no surprise the stock is down around 41% from its peak.
Still, I believe that BlackRock sees an opportunity, and may be thinking this company could turn the corner soon. Notably, NET Power has $645 million in cash, which is enough to fund the company for years until it can generate significant revenue and profits.
It may be unwise to suggest NET Power will be profitable anytime soon. That said, analysts think it will generate around $760 million in revenue annually in 2032. This could be an underestimate if clean energy activism keeps gaining ground and Net Power benefits from additional tailwinds.
BlackRock has a modest $3.3 million of the stock in its portfolio. It’s not much, but it’s definitely a bullish sign. Again, not many small growth stocks have been added to BlackRock’s ledger, so even small positions are quite notable.
On the date of publication, Omor Ibne Ehsan did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Omor Ibne Ehsan is a writer at InvestorPlace. He is a self-taught investor with a focus on growth and cyclical stocks that have strong fundamentals, value, and long-term potential. He also has an interest in high-risk, high-reward investments such as cryptocurrencies and penny stocks. You can follow him on LinkedIn.
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