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Chris HensenMoody's Corp.MCOPAST TOP PICKFeb 06, 2015

(A Top Pick Oct 20/14. Up 7.45%.) This industry is highly consolidated and this company controls 40% of the global ratings. They do 45% EBITDA margins. Putting that into context, the other 200 largest companies in the US have an average EBITDA margin of about 25%. This is a business that can increase prices every year. In the last couple of quarters, they announced an additional $1 billion buyback and increased the dividend by about 20%.

Chris Hensen

Owned

Unlock Rating

$98.04

Stock price when the opinion was issued

$454.13

As of Sep 30, 2026. Market Open.

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BUY ON WEAKNESS

Drop probably due more to the outlook for the bond market in general than to the company specifically. His father's friend used to say, "The bond crop never fails." The end of a tech bubble would see a diminished market for that area of fixed income, but there will always be a market for bonds (especially from governments).

BUY

They are THE data providers on anything AI on Wall Street, from ETFs to hedge funds. Lots of runway. A breakout is happening now.

PAST TOP PICK

(A Top Pick Mar 22/22, Up 5%)

Debt ratings are the biggest part of its business and there are only three companies that do this. The issuer of debt pays them when debt comes up for renewal or there is new debt.

BUY

With increase in rates, no one's issuing bonds. MCO writes credit reports, and if no one's issuing bonds, there are no reports to write. That can't last. Companies will eventually run out of cash and need to issue bonds. One of the best business models in the world. Happy to hold long term.

BUY

With higher rates, fewer bonds are being issued, so fewer credit ratings needed. Eventually, bonds have to be issued. A cyclical issue, nothing structurally wrong. Trades at 25x earnings. Don't miss a chance to buy one of the world's great businesses at a pretty attractive multiple.

TOP PICK

It's one of the three bond-rating agencies, which is a cozy, little club. $5 trillion of bonds are coming for renewal and all must get rated. Not a volatile business at all. High ROE, because it's capital-lite. It has room to raise the dividend or buyback shares. (Analysts’ price target is $384.29)

PAST TOP PICK

(A Top Pick Nov 19/19, Up 24%) Still buying for new clients. With low interest rates, many companies are taking advantage by issuing bonds. More growth ahead. In the first innings of ESG trend to know what you own.

STRONG BUY

If you believe that the future growth is going to continue, then you buy the stock now. Don't wait for the dip. He thinks the tailwinds with this one are terrific. All the debt being issued needs a credit rating.

BUY

He has SPGI right now from this industry. There will be a ton of debt issued in the near term so he likes this industry and feels it is going to benefit from the process we are going through.

BUY

The index providers and bond rating companies have a whim in what is going on in China. A lot of new debt being issued is from China. As long as we have companies issuing new paper there will be demand for these companies.

BUY

Likes it. Chart is running well. Well above the 200-day moving average. More service oriented. 10% growth rate. Decent name.

HOLD

New markets that open up like China are a great opportunity. Their relative strength to the market has been improving all year. Quite attractive with a 1% dividend that is growing steadily.

TOP PICK

If you want to issue a bond and issue it to institutional investors, there are only two companies you can use. Companies are going to take advantage of low interest rates and will issue bonds. There are a large amount of bonds maturing in the next 5 years and they have to be re-issued. (Analysts’ price target is $225.62)

COMMENT

They were hit hard at end-2018 when markets were worried over debt. A good company, but not its valuation--he'd be cautious over this.

HOLD

One of the three big bond rating services in the US. As such they have great pricing power and customers have to use you. When a bond gets rolled over, MCO-N will re-rate it. A great company with a great moat to protect it. He is happy to continue to hold it.

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Chris HensenMoody's Corp.MCOPAST TOP PICKFeb 06, 2015

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