I'm running screens for different financial data businesses. You may be familiar with some of the popular names like Dun & Bradstreet, Moody's and S&P Global. All three are some of the oldest companies in America. But I came across two names I didn't realize were public – Factset and MSCI.
Now MSCI is very profitable. Right now the company is delivering ~40% net profit margins. Very high. Software like net profit margins. I thought this company was taken private since their customer base is so lucrative – institutional investors. I'm not looking to invest in this type of business model but it's worth watching. You may be familiar with their index products. Revenue has been consistently growing 10% p.a. for the past five years.
What caught my attention was Factset. The company has been producing 20-25% net profit margins, which is very healthy. I also didn't realize this company was public since it never gets mentioned. It has a $15b market cap with $2b in revenue. Factset is growing like MSCI but I prefer Factset's software business model.
For me, Factset has a stickier customer base with less volatility. Index fund products by MSCI have great cash flows but every banker I know or met has used Factset. Same with hedge funds and other investors. I can't say the same about MSCI.
Either way, I'm looking to make an investment in Factset. The stock is nearing its 52-week low. I don't expect significant growth (maybe ~10%) but it'll be steady and compound.
My questions for the community:
- Have you looked or invested in Factset before?
- Have you used their product or a competitor product? i.e. Bloomberg, Refinitiv, Orion, Godel, OpenBB etc
Any feedback on financial data companies would be helpful. Even if they are private companies like TradingView, Estimize or Koyfin.
P.S. I'm looking for more stock market APIs. I have the common names (Alpha Vantage, Intrinio, Polygon etc.) Factset has excellent library of niche API data sources. Let me know if you use anything similar.
Tickers mentioned: $DNB $MCO $SPGI $FDS $MSCI $LSEG
Disclosure: no positions in the stocks mentioned
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