Thomson Reuters Corp (TRI.TO)

Continues to show 8% topline growth and good earnings. But the market doesn't seem to care. Competitive advantage today will not carry through to the future. Proprietary data won't protect them.

It was a market darling, but this AI business has hit them. Their main business is their legal database, and the fear is that AI will replace that. He expects TRI to protect their data and the stock to rebound in the future. Wait till you see an uptick.

Has been a great company, but people fear that AI will take over their business. These companies are going through a difficult period of people not understanding their businesses, which will continue to benefit from AI, not be erased by AI. There's still demand for TRI's services. TRI has been a great business for many years.

Really good business model. Fairly solid moat. Should benefit, not suffer, from AI. In the meantime, market's really punished it. From its previous lofty valuation, now trading ~18x PE. FCF of ~6%. Super-strong balance sheet. Lots of levers to pull to create shareholder value over the long term. Tremendous value right now as we wait for sentiment to change. Yield is 3.21%.

AI is perceived to impact it. Below 200-day MA, which has also fallen. AI continues to cloud its competitive advantages. Technical structure looks tough. Wouldn't add until some stability.

The market fears AI will take over software. The most important thing in this discussion is owning proprietary data that no AI can access. TRI probably fits this bill; they've collected years of data on accounting, law, health care, which is protected from AI. Demand for their products will continue. He owns TRI's peers like TMX, which are better run, but if you own this, don't sell TRI. TRI's fundamentals are still doing very well. The valuation is no longer extreme, but attractive. The Thomson family owns a lot of shares. Let it breathe and give it time. Would be attracted to it if he didn't already own similar names.

Ask yourself:  What's the difficulty of replicating its unique proprietary data? Provides go-to solutions for lawyers, and that has to be from a trusted provider. Last quarter's report showed that it'll probably be able to improve efficiency by adding AI.

Before the drop, it was trading at very lofty 50-60x PE, so some of this may be a recalibration of investor expectations to a more reasonable level.

A classic downhill chart that seems to be leveling off. Now, we see a transition based on a March low and slightly higher April low. It's a consolidation pattern. Scores 6/10. If the chart breaks out, it will be quite bullish.

Believes it's making strategy mistakes on AI. On price, he'd be a tactical buyer today. The road ahead is significantly worse than the road behind. There's no hope it's going back to $300 or anything close.

Getting disrupted in the highest-margin part of its business (legal division).

Such a big run, now a huge amount's come off. Looks attractive. Pace of change in the AI space makes things uncertain. Hard to determine pricing power of a tool. The market's not stupid, there are serious concerns.

One thesis says to look through that and say the moat will be fine. For him, it's too risky.

He bought it earlier this year as shares declined. He owned it before. It always had a high valuation until recently when it came down. Likes it long term. The street misses the extent of their data moat; they have proprietary content, plus many lawyers curated that content. Also, TRI will benefit from AI to enhance their products. Good data means good products, and they have good product run by good people. It now trades around 20x PE and a free cash flow yield of 5%. A pristine balance sheet.

Frustrating. Collapsed, then a big rally. Rolling over again. Jury's out on whether AI will kill its legal and accounting software. For himself, he likes the law firm of "Claude, Copilot, and Gemini" ;) 

TRI's legal business has a bit of a moat around it. There's true value there. We'll have fewer lawyers, but the ones left will need access to the kind of data supplied by RTI. It'll survive, but the question is what do you pay for it?

Is -32% in Q1 and one of the worst performers on the S&P. The street expects AI to displace their business, compiling financial data, which he uses on the show. The street won't wait to find out if AI will indeed displace them and will sell now anyway.