FactSet Research Systems Has Been Catching My Eye

Eddy Elfenbein submits: FactSet Research Systems (FDS) is a company whose products most professional money manager are familiar with, but it’s the stock that’s been catching my eye lately.

The story here is pretty simple: Wall Street is addicted to data and FDS is their dealer. The fundamentals are solid; fat margins, zero debt and nice history of churning out 20% EPS increases.

I’ll warn you, FDS is expensive although it recently got a little less expense. The shares are off about 20% from their high. I think the market is concerned that many of FDS’ clients are these dearly departed hedge funds. I doubt that’s the case. FDS has a large diversified client base (2,000 clients and 33,000 users). This is a well-entrenched business.

FDS 1-yr chart:

Comments

[Dan Jacome:]

I use Factset everyday -- it is a GREAT tool and is only getting bigger and better -- with compelling data and a solid balance sheet, it's also a great buyout target -- I know tons of companies who would love to have their product suite....

I wrote about FDS over a year ago and the stock has done nothing but go vertical

media.seekingalpha.com...

We're up 45% since that call, a lot more if you sold @ the top. Net net, FDS is a secular story and it's bottomed @ 55. Buy now.

Jacome -- IU/cevichefund.com

2007 Aug 22 05:19 PM