We are buying 25 shares of BlackRock at roughly $982.03. Following the trade, Jim Cramer’s Charitable Trust will own 100 shares of BLK, increasing its weighting to 2.75% from about 2.1%. We’ve built up quite a bit of cash this week thanks to our sale of Palo Alto Networks earlier Wednesday and our opportunistic trims of Nextracker into strength on Monday and Tuesday. Since we are now sitting on excess capital, we want to redeploy that cash into stocks of quality companies that have come down into the recent market weakness. BlackRock shares broke below $1,000 apiece Tuesday for the first time since the beginning of November and are off 8% since making a closing high of about $1,065 on Dec. 11. This pullback allows us to scale deeper into this small position and further improve our average cost basis. We added BlackRock to the portfolio in mid-October . BlackRock is the world’s largest asset manager with a strong track record of asset gathering through its iShares family of exchange-traded funds. It’s also been expanding its adjusted operating margins. More recently, the company has made a huge push into alternative strategies such as private markets through a series of acquisitions. Last month, the company announced a $12 billion deal to acquire HPS Investment Partners, an investment firm that is a leader in private credit with $148 billion in assets under management. The deal will make BlackRock a top five credit manager with about $220 billion in pro forma private credit client assets. We have been big fans of the deal and added to our BlackRock position a couple of times shortly after the announcement. There’s many reasons to like the HPS acquisition, including the fact it should be accretive to BlackRock’s adjusted earnings per share in the first full year after it closes. It also should be positive for long-term organic asset and base fee growth. And crucially, it should be a multiple enhancer for BlackRock’s stock. Traditional money managers trade at a discount in the market to alternative managers. The HPS deal — and the recently closed Global Infrastructure Partners acquisition — should help BlackRock attain a higher price-to-earnings multiple in the market over time. BlackRock is scheduled to report its fourth quarter earnings next Thursday, Jan. 15, before the opening bell. (Jim Cramer’s Charitable Trust is long BLK. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.
We’re buying more of a newer stock that is wisely pushing into a fast-growing market