PNC Financial CEO Buys 12,000 BlackRock Shares

• An insider has bought shares of a leading investment management company.
• The purchase comes after a mixed third-quarter earnings report.
• Insider buying can be seen as a good sign for investors.

Conventional wisdom says that insiders and 10 percent owners really only buy shares of a company for one reason: They believe the stock price will rise and they want to profit from it. So, insider buying can be an encouraging signal for potential investors, particularly during periods of uncertainty. Case in point: There has been a recent notable buy at New York-based investment manager BlackRock, Inc. BLK.

A director, who is also the CEO of PNC Financial Services Group Inc PNC (which has a 21 percent stake of BlackRock), purchased 12,000 shares of BlackRock this week. The share price for that purchase was $341.11, bringing the total to more than $409,000. The buy came in the wake of the recent third-quarter earnings report that included a beat on the bottom line, although the top line fell short of expectations.

BlackRock has a market capitalization of about $56 billion and a dividend yield near 2.7 percent. The consensus recommendation of analysts is to buy shares. The stock has retreated more than 3 percent since the earnings report and more than 8 percent from a 52-week high of $376.65 reached at the end of August, to close most recently at $341.24, still near the director's purchase price.

Disclosure: At the time of this writing, the author had no position in the mentioned equities.