BlackRock Tops Barron’s 500 List of Stocks with Top Returns
Money manager BlackRock (NYSE: BLK) earned the top spot in Barron’s list of top performing companies. No. 2 on the list is Blackberry-maker Research in Motion, (NASDAQ: RIMM) followed by two oil businesses National Oilwell Varco (NYSE: NOV) and Schlumberger (NYSE: SLB).
The Barron’s 500 (subscription required) ranks the 500 largest (by sales) publicly traded companies in the U.S. and Canada based on their successs in boosting their sales and cash flow.
This year’s No. 5, discount broker Charles Schwab, (NASDAQ:SCHW) managed to prosper despite the turmoil in financial markets, or perhaps because of the resultant surge in trading, Barron’s said. Like BlackRock, Schwab has no capital-markets operations, and therefore suffered none of the billion-dollar write-offs of bigger brokerages that made huge credit-related bets.
Five years ago Charles Schwab was nearer the bottom of the Barron’s 500 than the top. Barron’s says “The company owes its comeback — operationally and on our list — in part to the efforts of Charles Schwab himself, the brokerage’s 70-year-old founder.”
Ethics, integrity, consistency and the way we’ve treated our clients over many years has led people to understand this is a safe place to do business - Charles Schwab.
Audit Integrity recently sounded a note of caution about Schwab, including it on a its list of companies with concerns over its governance. Schwab was tagged as “Aggressive” under Audit Integrity’s Accounting and Governance Risk rating , which takes into account such factors as share repurchases and insider sales. Barron’s does not take such factors into account in its rankings, though it does exclude companies that have restated earnings.
The Barron’s 500 is prepared annually by Credit Suisse Holt, a unit of Credit Suisse Group. It compares companies on the basis of one-year sales growth and stock-price performance, three-year cash-flow return on investment, or CFROI, and one-year change in CFROI for the most recent fiscal year. It grades them A through F, using the percentage change in one-year cash flow to break ties and determine rankings.
For some, future gains could be harder to come by, at least in the near term, Barrons says.”Goldman Sachs, No. 1 last year and No. 2 in 2006, has seen its stock fall 17% to 187.72 in the past 12 months, though it ranks a respectable No. 19 this year. Apple, No. 3 in 2007, is still on a tear, however. Its shares are up 76% to 185.06, and this year it’s No. 11.”
Just as the Barron’s 500 identifies well-managed companies, it also pinpoints those that fail to generate sufficient returns on investment. Near the bottom of the latest ranking are home builders such as KB Home and Pulte Homes, also Eastman Kodak and Fannie Mae.
You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.
