Opinions Barry Schwartz
MSCI Inc.MSCITOP PICKJun 07, 2024
Barry SchwartzStock price when the opinion was issued
As of Nov 06, 2026. Market Open.
You might be interested:
;fill-opacity:1;'/%3e%3cpath%20d='M31%2018.6001V30H8V18.6001L14.1334%2022.4334L19.4999%2014L24.8669%2022.4334L31%2018.6001Z'%20fill='%23EE5432'%20style='fill:%23EE5432;fill:color(display-p3%200.9340%200.3310%200.1956);fill-opacity:1;'/%3e%3c/svg%3e){kind=small}
Premium contentWe reiterate MSCI, a provider of data solutions to the investment management sector as a TOP PICK. Recently reported earnings showed a 14% increase in EPS, in line with analysts five year outlook going forward. We recommend trailing up the stop (from $480) to $535, looking to achieve $730 -- upside potential of 18%. Yield 1.3%
(Analysts’ price target is $691.81)
Fundamentals are incredible. There is no challenge here. It's growing at double digits and trading at a lower PE than before. It boasts 95% recurring revenues. Hedge funds and ETF depend on their services.
Barry Schwartz(Note the short timeframe.) Q2 guidance was not as spectacular as current earnings, and the market punishes that. Doesn't change the fundamentals. Earnings and FCF are still good.
Barry SchwartzPremium contentWe reiterate MSCI, a world leader in data tracking used in ETF indices, as a TOP PICK. Its recent acquisition of First Street will allow its market reach to broaden further. Cash reserves are steady as shares are aggressively bought back -- albeit with slightly increasing debt. We recommend trailing up the stop (from $435) to $480, looking to achieve $697 -- upside potential of 23%. Yield 1.4%
(Analysts’ price target is $696.94)Premium contentMSCI is a world leader in the ETF world and is a TOP PICK. Recently reported earnings showed a 26% increase in market index fees collected, ETFs under management reached $2.8 trillion, and the analytic division had a 6% increase in fees collected -- all divisions looking good. Cash reserves are holding steady while the company aggressively buys back shares -- albeit with slightly rising debt (following a major acquisition). We recommend setting a stop-loss at $435, looking to achieve $713 -- upside potential of 27%. Yield 1.3%
(Analysts’ price target is $713.33)They have good gross margins and enjoy an oligopoly. They moved into real estate and alternative assets, too. They continue to do well. People have to use their indexes. It continues to grow.
Paul Harris, CFAMain provider of international-focused indices, which they license out. Very high margins and strong free cashflows. Benefiting as investors increasingly look outside US for market exposure.
Shares sold off on its being a data-services company, plus worries that active managers are in trouble from passive investing. Demonstrated ability to pivot. Big presence in ETF market. Shares trading more cheaply than they have for a while. Yield is 1.40%.
Great business, continues to grow. Diversifying outside traditional indexes into alternative asset classes. Lots of portfolio risk-management products.
Paul Harris, CFAHas 30k+ different indices. Used (and fees paid) by banks, asset managers, hedge fund managers. Will benefit from more ETFs created for international markets and stocks. Margins are near 100%, as they just reorganize data. AI-proof. Owns the data, which can't be replicated. Getting into ESG, climate, and more.
Valuation not cheap, but one of the top 5 world businesses we've ever seen. 95% recurring revenue. Bought back 5% of shares last year, as they'd underperformed for a couple of years. Yield is 1.33%.
Barry Schwartz
(Note the shorter timeframe.) Has moved sideways, but should do much better over the next year or two. Still a great business in an oligopoly of three.
Paul Harris, CFAMSCI continues to innovate. Has gross margins of 75%. Enjoys an oligopoly in financial data, which will always be in demand by asset managers.
Paul Harris, CFAStill loves it. Highly necessary products. Licensing fees go up every year. Next leg up for growth would be benchmarks for private equity, and they're working on it. Strength of international markets this year should give them an excellent year.
Barry SchwartzSolutions and data analytics for the investment management industry. Benchmark indexes, performance measurement, risk management (especially important with all this volatility). Very good numbers today, good growth of almost 10%. Huge growth potential in alternative asset classes. Gross margins down slightly. 95% customer retention rate. Only 3 players in the space. Yield is 1.36%.
(Analysts’ price target is $633.83)Paul Harris, CFA
All his Top Picks today are high margin, low capex, run by great management teams, generating lots of free cashflow.
(Analysts’ price target is $545.07)Index business -- fund managers need to use benchmarks, owned by MSCI, for which they pay a licensing fee that goes up every year. 290K indices that they sell. A Top 10, great business in the world, but valuation always expensive. Big dip in April-May, missed earnings expectations.
A play on global growth, generates lots of free cashflow. Topline and bottom line should grow by double digits for a very long time. Yield is 1.3%.