TMX Group (X.TO)

Results last week were very good, dividend increased. Not particularly exposed to a downturn in IPOs or equity issuance, but it's nice gravy when it does have a good quarter on those. Under pressure because one segment touches on software -- but the proprietary nature of data and strong network mean they're insulated from AI disruption.

Pullback is compelling opportunity for new investors.

Came out of the position in August, as it broke technically. Now trading around the 200-day MA. In financials, focus on where the strength is, and that's the large banks. Likes it long term as a data play. Tricky market backdrop, so be careful when you add.

Runs TSX and other trading platforms. Revenue not just from trading, but also from data analytics (42% of total revenue and growing double digits). Recent pullback (due to slowdown in new listings) hitting nice support level. Not a bad time to add. Derivatives trading delivered strong 27% growth YOY. Ranks 9/10, sees just over 25% upside from here.

Healthy balance sheet. Dividend is reliable. Yield is 1.74%.

Within the sector, all of the exchanges have been backing off over the last 3 months. He came out of this name partway through July. Below 200-day MA, and all MAs are moving lower. 70% of S&P companies have performed better over last 12 months. Laggard. Better opportunities.

We would be comfortable buying X today.
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X has fallen from $58 to $54 over the past month, but it is still up 22% year-to-date and 25% on a one-year basis. Despite the recent negative price action, we view its overall trend as still very much intact, and we think this type of consolidation is healthy. It trades at 26X forward earnings, and we are not concerned by this recent move. We would be comfortable slowly averaging in here, or adding a new position.
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Slogan for good stock candidates:  "The longer the base, the better the case." This chart had a big base for several years. Then it broke out, and look what happened. You can see this over and over again in stocks. 

Moved into an uptrend, arced off aggressively. Now pulling back from being overbought, will likely retrace to somewhere near the trendline which is probably somewhere near the 200-day MA (don't expect it to hit exactly). Not a disaster at all. On the chart from Feb-April of this year, those previous buyers may sell if it breaks that level of ~$51-52. Keep an eye on that.

He likes the sector but it is not really a small cap now so he doesn't own it. It created a lot of value with their strategies and carved out out some very unique assets. He feels the value is a bit stretched. He owns Euronet which trades in France

A wonderful performer in recent years. Not just the TSX, but they have businesses around the world like trading platforms and economic data/analytics, based on subscriptions, so lots of recurring revenues. Their results may move a little due to trading volumes and new listings, but TMX is so diversified that enjoy recurring high margins. The stock has been on a tear, and not cheap now. One of the best companies in Canada.

Fingers in a lot of stock-exchange pies. Companies pay to keep stocks listed. Fees from trading activity, which has been fast and furious. Options market has been even more frenetic. Also has sticky recurring revenue businesses, which are less cyclical. In his dividend growers mandate. Globally diversified.

Consistently does well. You might want to wait for it to pop down. Decent one to buy now and hold for 5-6 years.

One of his top 10 positions. All of the exchanges are trading well. Volumes are strong. Has held up during recent weakness. Trading better than 92% of companies in the S&P over the last 12 months. Nice steady earnings growth ahead of it, nice dividend growth.

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.

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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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.