BlackRock Inc. Boosts Stake in Crown Holdings Inc.
BlackRock Inc. (Trades, Portfolio), a leading investment management corporation, has recently increased its holdings in Crown Holdings Inc., a prominent player in the global packaging industry. This article will delve into the details of the transaction, provide an overview of both companies, and analyze the potential implications of this investment.
Details of the Transaction
On July 31, 2023, BlackRock Inc. (Trades, Portfolio) added 5,099,161 shares of Crown Holdings Inc. to its portfolio at a trade price of $92.76 per share. This transaction increased BlackRock's total holdings in Crown Holdings to 12,151,893 shares, representing a 72.30% change. The trade had a 0.01% impact on BlackRock's portfolio and increased its position in Crown Holdings to 10.10%. Despite this significant addition, Crown Holdings only accounts for 0.03% of BlackRock's vast portfolio.
Profile of BlackRock Inc. (Trades, Portfolio)
Founded in 1988, BlackRock Inc. (Trades, Portfolio) is a global investment management corporation with a significant presence in virtually every financial market worldwide. The firm operates through a large group of subsidiaries and has 21 investment centers and 70 offices in 30 countries. BlackRock's investment philosophy is rooted in risk management, with its platform monitoring about 7% of the world's total financial assets. The firm's top holdings include tech giants like Apple Inc., Amazon.com Inc., Alphabet Inc., Microsoft Corp., and NVIDIA Corp. BlackRock's equity stands at a staggering $3,388.31 trillion, with the technology and healthcare sectors being its top sectors.
Overview of Crown Holdings Inc.
Crown Holdings Inc., with a market capitalization of $10.78 billion, is one of the world's largest producers of metal packaging. The company, headquartered in the United States, manufactures beverage cans, metal food cans, closures, aerosol cans, and a wide variety of protective transport packaging. Despite being based in the U.S., the majority of Crown's sales come from its operations in Europe, South America, and Southeast Asia. The company's stock is currently priced at $89.32, with a PE percentage of 22.56. According to GuruFocus, Crown Holdings is significantly undervalued, with a GF Score of 83/100, indicating good outperformance potential.
Crown Holdings Inc.'s Financial Performance
Crown Holdings Inc. has demonstrated solid financial performance, with a Profitability Rank of 8/10 and a Growth Rank of 6/10. The company's Financial Strength is rated 4/10, with a cash to debt ratio of 0.07. Crown's interest coverage stands at 3.13, and its Altman Z score is 2.06. The company's Piotroski F-Score is 7, indicating a healthy financial situation. Crown's return on equity (ROE) is 24.95%, and its return on assets (ROA) is 3.30%. Over the past three years, the company has seen a revenue growth of 14.60%, EBITDA growth of 10.40%, and earning growth of 27.80%.
Industry Overview and Other Gurus' Investments
Crown Holdings operates in the packaging and containers industry, which is currently experiencing various trends and challenges. Other gurus who have invested in Crown Holdings include Jefferies Group (Trades, Portfolio), Tom Gayner (Trades, Portfolio), and Mario Gabelli (Trades, Portfolio). The largest stake in Crown Holdings is held by Icahn Capital Management LP.
Conclusion
BlackRock Inc. (Trades, Portfolio)'s recent acquisition of Crown Holdings Inc. shares is a significant move that further diversifies its portfolio. Given Crown Holdings' strong financial performance and undervalued status, this investment could potentially yield substantial returns for BlackRock. However, as Crown Holdings only accounts for a small fraction of BlackRock's portfolio, the impact of this transaction on the firm's overall performance may be limited. As always, investors are advised to conduct their own thorough research before making investment decisions.
This article first appeared on GuruFocus.
