Currently researching a few fintech stocks and noticed the financial data provider stocks are a quiet niche. In fact, a few names are near their 52-week lows (DNB, FDS, MSCI).
Dun & Bradstreet caught my eye for a few reasons. First, it is oldest company on the list (1841). The next two oldest stocks are S&P (1860) and Moody's (1909). The longevity of all three names surprised me. You'd think financial data stocks would have shorter lifespans.
Either way, D&B is interesting because of its upside down balance sheet. Bill Foley, a notable fintech investor, took D&B private in 2018 for $5.4b. He's also a large stakeholder of $FNF and $FIS. But since going public again, D&B is burdened with too much debt. The company is barely breaking even. And the stock has been trending downwards since the IPO.
Now I don't think think the company will go out of business. But the stock will probably fall another 40-50% and stabilize to $4-5 per share. Which will make it interesting and less risky. $5 would be the floor since larger buyers would sweep in to avoid it from delisting on the NYSE. Plus the market cap would be ~$2b at that point. More people will look into it.
The downsides are the heavy debt load and downward spiral stock price. The upside is the longevity and business model. It's worth noting that Cognizant $CTSH and Moody's spun out of D&B too. Both of which are excellent businesses. $BRK owns 13% of $MCO.
I'm interested to hear your experience using these data providers and D&B. FactSet is also near its 52-week low but a much better business model. I'll be looking into that name next.
Stocks mentioned: Dun & Bradstreet $DNB, FactSet $FDS, MSCI $MSCI, S&P Global $SPGI, Moody's $MCO
Disclosure: No positions
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