Both novice and experienced investors should explore some of the appealing, undervalued stocks owned by BlackRock (NYSE:BLK) holdings. The investment company is among the world’s leading asset managers and has survived every recession since its founding in 1988. Not only that, but in less than 35 years, the company has built up its total assets under management (or AUM) figure to $10 trillion in 2021. Its AUM currently sits around $8.6 trillion, which is nothing short of impressive.
The company is also quite diversified, but it is heavily exposed to some large tech stocks. BlackRock’s top three holdings are Apple (NASDAQ:AAPL), Microsoft (NASDAQ:MSFT), and Amazon (NASDAQ:AMZN). BLK owns $141 billion of AAPL stock, $120.8 billion of MSFT, and $65.8 billion of AMZN.
BlackRock, however, has decreased its positions in all three of those companies by millions of shares. In addition, BlackRock’s last 13F filing was on Nov. 2022, and it’s hard to know the firm’s stance on these stocks right now, since the stock market is still volatile.
With that in mind, I’ll be discussing stocks in which BlackRock increased its positions by a significant margin in Q3. The following three names fit that description:
| TSLA | Tesla | $128 |
| VZ | Verizon | $40 |
| KO | Coca-Cola | $60.20 |
Tesla (TSLA)
While I’m no fan of Tesla CEO Elon Musk, I’d have to disagree with the idea that Tesla (NASDAQ:TSLA) is “just another car company.” Let’s compare its financial results to those of some other automakers to see if TSLA is unique.
- Net income surged 103% year-over-year.
- Total revenues increased by 56%.
- EBITDA climbed 55%.
- Earnings per share soared 98% YoY.
Now let’s look at one of Tesla’s most important competitors, Mercedes-Benz (OTCMKTS:MBGAF), which competes with Tesla’s higher-end offerings.
- Net income jumped 111% YoY.
- Revenue increased 19%.
- Diluted EPS surged 58.4%.
- EBITDA grew 11.5% YOY.
It is also worth noting that the company’s Altman-Z score, a measure of financial strength, indicates that the firm is in “distress,” according to Gurufocus.com, even though Mercedes-Benz is by far Tesla’s strongest Western competitor, in my view.
Let’s look at some other car companies.
- Revenue increased by 33.3% year-over-year.
- EPS grew 9% YoY.
- Losses widened to $827 million.
- Revenue increased by 10.4%.
Other electric vehicle makers, such as Rivian (NASDAQ:RIVN) and Lucid (NASDAQ:LCID), are losing money and are growing much slower than Tesla. It’s hard to think of them as real “competitors” of TSLA.
We can also talk about some Chinese EV makers, such as BYD (OTCMKTS:BYDDY). But the latter company already has a price-earnings ratio of 269 times. Moreover, BYD cannot dominate in Western markets unless those nations’ relations with China improve.
With that in mind, Tesla is definitely among the of the appealing, undervalued stocks owned by BlackRock . BlackRock increased its position in TSLA in Q3 2022 by 5.75 million shares.
Verizon (VZ)
Verizon (NYSE:VZ) is another, deeply undervalued company. The U.S. is prioritizing communications infrastructure in order to compete with China, and I believe that Verizon will benefit a great deal from America’s efforts in that area.
Verizon’s net income sank almost 25% in Q3. But it’s unlikely that the trend will continue into 2023 because its comparisons will get easier. Verizon is well entrenched in the American market, and it won’t be too long until it stock bottoms out and its valuation rises.
BlackRock certainly knows that, and the investment company increased its position in VZ stock by 3.1 million shares in Q3.
Coca-Cola (KO)
Investing in Coca-Cola (NYSE:KO) is an excellent way to diversify a portfolio. KO is one of the most well-known brands in the world and has had a long track record of success. This defensive stock has remained steady during the harshest economic conditions and performs better than the broader market during volatile periods as investors pour into defensive stocks.
The company is also a dependable dividend payer, having increased its dividends for 61 consecutive years. Coca-Cola’s current forward yield stands at 2.94%.
Additionally, Coca-Cola’s financials are solid. Its net income increased 14.3% YOY in Q3, and its top line grew at a double-digit-percentage clip in Q3. Surprisingly, even its net margin increased while most companies’ net margins dropped, giving BlackRock confidence in Coke’s ability to survive a recession
The firm increased its position in KO by 2.1 million shares.
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.
