A BlackRock Board Member Bought $100,000 in Stock

BlackRock does have a good record of growth, but other large-cap asset managers might be cheaper. We took a brief look at State Street Corporation (NYSE:STT), Ameriprise Financial, Inc. (NYSE:AMP), Franklin Resources, Inc. (NYSE:BEN), and T. Rowe Price Group, Inc. (NASDAQ:TROW). The two larger companies- State Street and Franklin- have trailing earnings multiples between 13 and 15, so something of a discount to where BlackRock trades. Earnings growth in these companies’ most recent quarterly reports compared to the same period in the previous year was at about 20% as well, and so investors interested in the asset management industry should consider them as well as, or possibly instead of, BlackRock.

Ameriprise and T. Rowe Price carry trailing P/Es of 18 and 22, respectively, though Ameriprise in particular has been singled out as having high growth prospects with the Street’s estimates placing the current price at only 10 times 2013 earnings. Ameriprise also stands out as being the only one of these five companies to report a drop- and a large one at that- in earnings in its most recent quarter versus a year earlier. T.Rowe Price’s financial performance has been very strong, though we think that is accounted for by its high multiple.

If we put some weight on the recent insider purchase, then BlackRock joins State Street and Franklin Resources as asset managers with trailing earnings multiples in the teens and high recent earnings growth. That is a good formula for at least the beginning of a value analysis and these three companies are worth further research in our view.

Disclosure: I own no shares of any stocks mentioned in this article.