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Market corrections provide opportunities to buy into companies like BlackRock, says Michael Cintolo of the Cabot Wealth Advisory.

Today, I want to present you with a bigger, well-sponsored stock that I think still has great upside if the market keeps going. It’s BlackRock (BLK), the huge money manager (and owner of the iShares franchise).
 
Here’s what I wrote about BlackRock back in mid-January, when I named it my Editor’s Choice for the week in Cabot Top Ten Trader:
 
“As the general market has heated up, I’ve noticed more and more “Bull Market stocks”—brokerage, investment bank, and asset-management firms, each of which directly benefit from higher stock prices and increased trading activity—pushing to new highs.

"BlackRock might be the granddaddy of the group—the company has an almost unbelievable $3.8 trillion of assets under management! Obviously, that’s not all mom-and-pop investors, but big institutional pension and hedge funds, as well as some very wealthy individuals.

"One big driver is the firm’s iShares business, which was acquired in 2009 and has been a big hit. BlackRock’s top brass alluded to a secular shift into exchange traded funds (ETFs) and more passive investments, which plays right into iShares’ hands.

"Best of all, management is committed to returning cash to shareholders—it just hiked the dividend 12%, resulting in an annual yield just south of 3%, and continues to buy back shares quarter after quarter. The company repurchased about 5% of its shares last year, and has authority to buy another 5% going forward.

"With sales growth picking up, earnings growth accelerating, and the potential for better-than-expected earnings in 2013 if the market continues its winning ways, I think BlackRock has solid upside.”
 
Earnings are expected to rise 13% this year, though I think that’s likely conservative, especially if the market’s bull trend continues. BlackRock isn’t going to make you rich, but I also think it can surprise on the upside if the market behaves itself.
 
As for the stock, it hasn’t gone much of anywhere during the past month. To me, that lack of spunk is offset by BlackRock’s resilience of late. It’s still perched right near its peak.

If you really want in you could buy some here, but ideally, the market will have another shake in the days ahead, possibly dragging this stock toward support. That would probably make it a solid buy, and you could use a tight stop when you get in.
 
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