For much of its history as a public company, FactSet (NYSE:FDS) shares have frustrated the value and GARP
crowds. Now the shares look more reasonably valued, but the cause is
yet another reason for concern. With sluggish employment trends in the
financial sector and worries about competition from the likes of Bloomberg, McGraw Hill Financial's (NYSE:MHFI)
S&P Capital IQ, now growth appears to be an issue for the company.
While the company is likely to do better over the long term, investors
considering these shares today need to be prepared for a little more
volatility than with the average equity.
To read more, please go here:
http://www.investopedia.com/stock-analysis/061813/valuation-finally-reasonable-factset-growth-now-concern-fds-tri-mhfi-bac.aspx
Showing posts with label FactSet. Show all posts
Showing posts with label FactSet. Show all posts
Tuesday, June 18, 2013
Thursday, September 27, 2012
Investopedia: Overvaluation Could Split The Fortunes Of FactSet And Its Stock
It has been a few years now since I've had a regular Wall Street desk job, but I still miss having FactSet's (NYSE:FDS)
databases and analytic tools close-at-hand. Not only does this
financial information company offer a very sticky product, but the
company also continues to add functionality and breadth to its platform.
Unfortunately, the Street has long had a love affair with the stock as
well, and I am worried that the process of transitioning from growth
stock multiples to those of a more mature company could be a tough one
for shareholders.
Please read more here:
http://www.investopedia.com/
Please read more here:
http://www.investopedia.com/
Wednesday, September 21, 2011
Investopedia: More Data, More Profits for FactSet
Individual investors may hear the occasionally quip about "paralysis by analysis," but the fact remains that institutional investors (on the whole) love their data. Feeding this endless appetite has been a boon for companies like IBM (NYSE:IBM), EMC (NYSE:EMC) and Bloomberg, as well as smaller players like FactSet (NYSE:FDS), and it does not look like the data deluge is in any danger of drying up soon.
A Solid End to the Fiscal Year, or Is It?
FactSet closed out its fiscal year with a solid financial report relative to Wall Street expectations, but careful examination is a little more concerning. Revenue rose 14% this quarter, with 15% growth in the U.S. helping to offset 12% growth in foreign revenue. While FactSet did do a solid job of adding new clients (and getting more paying seats at existing clients), the company is not doing quite as well in terms of wringing more revenue out of each client - client count increased 6% this quarter versus last year, while the number of users increased 12%. In terms of revenue per customer, then, the company saw very modest growth of just 1.5% (to about $3,990 per customer) while revenue per client rose a bit less than 8% to just under $86,000.
Click the link below for more:
http://stocks.investopedia.
A Solid End to the Fiscal Year, or Is It?
FactSet closed out its fiscal year with a solid financial report relative to Wall Street expectations, but careful examination is a little more concerning. Revenue rose 14% this quarter, with 15% growth in the U.S. helping to offset 12% growth in foreign revenue. While FactSet did do a solid job of adding new clients (and getting more paying seats at existing clients), the company is not doing quite as well in terms of wringing more revenue out of each client - client count increased 6% this quarter versus last year, while the number of users increased 12%. In terms of revenue per customer, then, the company saw very modest growth of just 1.5% (to about $3,990 per customer) while revenue per client rose a bit less than 8% to just under $86,000.
Click the link below for more:
http://stocks.investopedia.
Thursday, March 17, 2011
Investopedia: Financial Services That Buffett Could Love
With Berkshire Hathaway's (NYSE:BRK.A) annual report in hand and the recent deal for Lubrizol (NYSE:LZ) still in the news, there is once again a fair bit of interest in speculating on what sorts of companies Warren Buffett would (or does) like. Though specific predictions of Mr. Buffett's moves are more often wrong, there are a handful of non-bank financial services stocks that investors may want to consider with an eye towards their franchise value and difficult-to-replace market niches. (For more, see Emulate Buffett For Fun And Profit - Mostly Profit.)
Making Payroll Services Pay
Automatic Data Processing (NYSE:ADP) and Paychex (Nasdaq:PAYX) do more than just handle payroll (for large and smaller companies, respectively), but that is their signature business lines. There is a lot here that an investor seeking to emulate Warren Buffett should find attractive. (For more, see Buffett Picks To Coattail.).
This is a recurrent fee-collecting business; people get paid on a regular schedule and these companies can collect a small fee every time they do. It is also a bet on the recovery and prosperity of the country; more jobs means more payroll and more demand for payroll services (and Buffett is a noted optimist on the long-term prospects of the U.S. economy). Last and certainly not least, each company produces a "float" of money, money paid to the companies for payroll but not yet disbursed to employees, that can be profitably invested.
Please continue to the full article:
http://stocks.investopedia.
Tuesday, December 16, 2008
Just the FactSet, Ma'am
Well, FactSet (NYSE: FDS) has done it again ... strong revenue and operating income, despite the tough market conditions.
It's interesting to see the subscription numbers; interesting particularly that there hasn't been any apparent impact to all of the hedge funds that are going out of business, nor the spending cutbacks that are going on at bigger institutional shops. So while hedge funds aren't a huge part of FactSet's business (about 6% of subscription value according to this quarter's data), you'd still think there'd be some knock-on effect.
The bottom line is that clients really do see a lot of value in FactSet. Subscriptions generally cost well above $10,000 a year and many firms have multiple subscriptions. That's not a tremendous expense for a shop like T.Rowe Price or Vanguard, but it is more meaningful for smaller shops. It wouldn't surprise me if some firms have made the choice to cut an extra worker or two in order to keep funding the FactSet feeds. Some may see that as heartless, but I think it's a pretty strong affirmation of the perceived value in the product.
This is a company I can love ... the margins are high, the returns on capital are high, the barriers to entry are high, and the growth potential is high. FactSet has a long way to go to catch Bloomberg in terms of the pervasiveness of the product and the features/information offered ... and Bloomberg itself probably still has a ways to go. So, there's plenty of room to grow for a long time to come.
These shares also look pretty cheap ... though so does almost everything these days. This stock probably can't recover until the overall market looks more stable, but this looks like a good one to start accumulating with an eye towards holding it as a long-term core growth position.
It's interesting to see the subscription numbers; interesting particularly that there hasn't been any apparent impact to all of the hedge funds that are going out of business, nor the spending cutbacks that are going on at bigger institutional shops. So while hedge funds aren't a huge part of FactSet's business (about 6% of subscription value according to this quarter's data), you'd still think there'd be some knock-on effect.
The bottom line is that clients really do see a lot of value in FactSet. Subscriptions generally cost well above $10,000 a year and many firms have multiple subscriptions. That's not a tremendous expense for a shop like T.Rowe Price or Vanguard, but it is more meaningful for smaller shops. It wouldn't surprise me if some firms have made the choice to cut an extra worker or two in order to keep funding the FactSet feeds. Some may see that as heartless, but I think it's a pretty strong affirmation of the perceived value in the product.
This is a company I can love ... the margins are high, the returns on capital are high, the barriers to entry are high, and the growth potential is high. FactSet has a long way to go to catch Bloomberg in terms of the pervasiveness of the product and the features/information offered ... and Bloomberg itself probably still has a ways to go. So, there's plenty of room to grow for a long time to come.
These shares also look pretty cheap ... though so does almost everything these days. This stock probably can't recover until the overall market looks more stable, but this looks like a good one to start accumulating with an eye towards holding it as a long-term core growth position.
Subscribe to:
Posts (Atom)