Thursday, April 12, 2012

FactSet Research (FDS) 2012 Review


FactSet Research, FDS, supplies financial and economic data including to the global investment community through 1600 databases with information on tens of thousands of companies, multiple stock markets and governments.

The company earns a 25%+ return on equity and has grown earnings and dividends 20-25% over the last ten years. FDS should continue its above average performance as a result of:

(1) its portfolio analytics system is the industry leader; because of its extensive product development and strong client relationships, FDS has not only created a high barrier to entry but is also increasing its market share,

(2) its ability to sell additional products to existing customers such as coverage of corporate bonds and fixed income derivative securities as well as products for investment banking, plan sponsors and corporate finance,

(3) acquisitions.

Negatives:

(1) it is in a highly competitive industry,

(2) the risk of a shrinking ‘soft dollar’ [means of payment] pool.

FDS is rated A by Value Line, has no debt, and its stock yields 1.2%.

Statistical Summary

Stock Yield Dividend Growth Rate Payout Ratio # Increases Since 2002
FDS 1.2% 11% 22% 10
IND 1.5 6 26 NA

Debt/Equity ROE EPS Down Since 2002 Net Margin Value Line Rating
FDS 0% 31% 0 23% A
IND 27 12 NA 17 NA

Chart

Note: FDS stock made great progress off its November 2008 low, quickly surpassing the downtrend off its October 2007 high (red line) and the November 2008 trading high (green line). Long term, the stock is in an uptrend (straight blue lines). FDS had been in an intermediate term uptrend until mid 2011 when it broke that trend and re-set to a trading range (purple lines). The wiggly blue lines are Bollinger Bands. The Aggressive Growth Portfolio owns a full position in FDS. The upper boundary of its Buy Value Range is $60; the lower boundary of its Sell Half Range is $138.




http://finance.yahoo.com/q?s=FDS




Steve Cook received his education in investments from Harvard, where he earned an MBA, New York University, where he did post graduate work in economics and financial analysis and the CFA Institute, where he earned the Chartered Financial Analysts designation in 1973. His 40 years of investment experience includes institutional portfolio management at Scudder, Stevens and Clark and Bear Stearns. Steve's goal at Strategic Stock Investments is to help other investors build wealth and benefit from the investing lessons he learned the hard way.