Stockchase Opinions

Danesh Rohinton TMX Group X-T WATCH Jul 25, 2024

Analysts have not loved this stock for a while, yet it keeps creeping up.

Great company, especially in the context of Canada. He has a few questions about its capital allocation as it's moving into the US, goals seem a little ambitious. Quality firm, generates a lot of cash. Don't chase; valuation is mean reverting.

Keep it on your watchlist. Pick away as the valuation comes down.

$41.750

Stock price when the opinion was issued

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HOLD

A monopoly on the markets, no one has successfully challenged its hold. Clips a coupon when shares get traded, so it benefits from volatility. Huge amount of data that they sell. Range-bound, but you should see better results.

Unspecified

It has done well, is well run, and is a good investment for the long term. A broad play on the stock market.

DON'T BUY

Business depends on new listings, and right now there are fewer IPOs. It's grouped as a financial, but he sees it as a tech platform, and that's where the difficulty is in assessing it. Not looking to buy.

BUY
Buy or hold?

Stock exchange plus sells data. Good businesses. Fewer IPOs contributed to a slump, but next year will be better. Will grow its data offerings through AI. Good investment over the long term. Not a bad place to buy here.

PAST TOP PICK
(A Top Pick May 18/23, Up 21%)

Very strong business with excellent business model. Stock performance has been very strong. Data and analytics business also expected to rise. Steady dividend growth with 2% yield. Trading at 20x earnings. 

BUY

Recent all time high in share price. Owns shares and will continue to own. Capital light business that is able to generate strong profits. Well executed investor day recently. Has a diverse offering of trading platforms. Would recommend holding for the long term investor. A majority of revenues are recurring which is excellent for profits. 

HOLD

Rising with the market. Pop in July. We've had a correction, but it's important that it hasn't corrected back to where it broke out at $38.50. At this point, it's just a correction within an uptrend. On RSI, nicely in the upper half, doing pretty well.

BUY ON WEAKNESS
Trevor Rose’s Insights - Trevor’s most-liked answers from 5i Research

We continue to like TMX group. They should continue to benefit in an uptrending market and from a valuation persepctive, given the stability and steady growth, we don't view the 23X P/E as particularly 'challenging'. If a bit more deal activity comes back in the New Year, TMX should see an extra tailwind as well. For entry price, we think something in the range of low to mid-40's here makes sense.
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BUY

One of his largest positions. Very well run. Likes that it got into owning and selling proprietary data for ETFs and the energy industry. Phenomenal business model. Double-digit grower. Valuation quite reasonable. No plans to sell.