Thomson Reuters Corp (TRI.TO)

Pulled back with lots of other software names. Proprietary database for law, accounting, and healthcare. Topline growing high single digits, bottom line double digits. Enormous amount of free cashflow. Market's worried about AI. A neatly bundled one-stop solution for its subscribers.

Fantastic business model, trading ~20x PE. He's attracted to it, but likes what he owns already so wouldn't know what to sell to buy this one. Take a hard look at it.

He always had trouble understanding it, given all its acquisitions. Too complex though it has brand recognition and is well-run. Hold on, if you own. But he loves this sector. 

All sorts of data, which drives the backbone of data needs for a number of enterprises. Surprisingly wide economic moat. Competitive threat may be increasing somewhat. Valuation's always been a sticking point for him. 

If the underlying business is good, take advantage of drawdowns.

Decent earnings print last quarter. Legal/professional side up 9% for organic growth, but print side is suffering from investment in Globe and Mail (organic growth down 4%). Slow print recovery, government cancellations, softer corporate sales momentum.

Business is solid. Decline of 15% recently. For most investors, decent time to add.

Managed very well, now selling financial data and focussing on AI and their legal business. Doesn't know if the stock can recover. AI could make them a winner or loser. Can't say buy or sell.

Issue is the valuation. Growth has been good, but it's at a 25x cashflow multiple. That's excessive. Once in a while, the market just starts to choke on valuation when a company can't demonstrate anything new.

Have done well streamlining the business, existing the financial data business. They provide info to lawyers and accountants, good businesses where they lead. Will AI benefit or hurt them? He thinks it will benefit, and AI will lead to them raising prices in their services.

Likes it. Its segments all benefit from AI. Beat on the quarter, but market wasn't happy with the guidance. Very richly priced at 41x for 2027, with only 11-12% growth. Don't buy here. He holds some and is letting it ride. 

It missed earnings and there is a concern with AI. It has done well for a long time and should evolve. It takes a while for the sellers to move out and when they do you could step in.

He wishes he bought this years ago. Five years ago, new management pruned the business to unlock organic growth. The PE is rich now, though, above 30x PE. Is growing very well. Are integrating AI in their platforms, so is well-positioned for the future.

EPS of 87c beat estimates of 82c; revenue of $1.78B missed estimates of $1.80B. EBITDA of $678M beat estimates by 3%. Revenue rose 3%. Transactions revenue was up 5% but global print revenue was down. In the Q3, TRI expects 7% organic growth. Guidance for the year was re-iterated. We are comfortable with the results. While not a blow-out, good growth is still expected.  The stock has been very strong and we would not read too much into today's decline.
Unlock Premium - Try 5i Free   

This name is basically nothing but data, and we've been talking about AI over the last couple of years. Significant opportunity to layer AI over their data in law, healthcare, and financial services. That's the long-term story here, we're in very early days.

Mission-critical information for legal, tax, and accounting professions. Not huge topline growth. Very strong recurring revenues. Always looks expensive, today PE is ~50x. You can get twice the same earnings yield in bonds and in the markets.

TRI remains one of our favourite conservative-growth companies. It has held up very well in the market meltdown. It does have a premium valuation, but we would still be comfortable buying in the $245 range. 
Unlock Premium - Try 5i Free

Very much technology-driven in have-to-have services in accounting, law, and other areas. Gaining penetration in its industries. Problem now is the high multiple, has become more like a growth stock. Better places to look.

It never hurts to take a profit, because you never really make money until you actually realize it. Overall, he's cautious on markets. When markets fall, they often throw the baby out with the bathwater; good companies go down, but perhaps not as much as the high flyers.