Big-name stocks like Microsoft (MSFT), Apple (AAPL) and Facebook (FB) tend to dominate IBD’s monthly list of new buys by the best mutual funds. But they aren’t the only stocks to watch. Case in point: Mortgage industry leader Black Knight (BKI).
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Based in Florida, Black Knight provides software and analytics to help facilitate and automate mortgage and home lending and servicing. Owned by 95 funds with an A+ rating from IBD, Black Knight made the latest list of new buys by top-performing money managers.
Over the last three months, 12 of these leading funds invested approximately $40 million in BKI stock. While that pales in comparison to the amounts invested in Microsoft stock ($3.1 billion), Apple stock ($2.5 billion) and Facebook stock ($1.3 billion) during the same period, it’s a welcome indicator of the quality of Black Knight’s institutional sponsorship.
Black Knight also just earned a spot on the IBD Breakout Stocks Index. That puts it in good company with household names such as Microsoft, Facebook, and FANG stocks Netflix (NFLX) and Alphabet (GOOGL).
See Stocks On The IBD Breakout Stocks Index
Top Funds Lift BKI Stock Near All-Time High
Since going public in 2015, BKI stock has been climbing relatively steadily. Despite the damage caused to the economy by the coronavirus pandemic and the rise of forbearance requests from homeowners, the stock is back to trading near its all-time high. Black Knight’s financial software industry group ranks No. 33 among the 197 groups IBD tracks.
Black Knight is on pace to notch its eighth straight up week, bringing it to within 4% of a 76.54 buy point. BKI’s relative strength line is right around a new 52-week high.
Like Facebook, Apple and Microsoft and the major indexes, Black Knight sold off at the close on Tuesday. But BKI stock is showing reslience, rising nearly 2% early Wednesday.
Black Knight announced Q1 earnings on May 5, reporting another quarter of single-digit EPS and sales increases. While not a particularly fast-growing enterprise, Black Knight continues to attract the highest-rated mutual funds. T. Rowe Price (PRNHX), Fidelity OTC (FOCPX), MFS Growth (MFEGX), and Invesco Mid Cap Growth (VGRAX) all have stakes in the mortgage industry leader.
It’s an encouraging sign to see these leading fund managers with a long track record of success take a look at Black Knight and decide to hold or add to their positions.
Analysts expect Black Knight to post a 1% earnings decline in 2020, but bounce back to a 17% gain in 2021.
Follow Matthew Galgani on Twitter at @IBD_MGalgani.
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