Dun & Bradstreet: Weeding Out Disinformation in the Information Age

Scanning the charts this week, it’s ironic that the best low risk high reward trade setup I could find is with a company that checks and rates companies financial information and provides other business information services. Too bad the US taxpayers didn’t have this company check the credit rating of the Fed, Fannie Mae (FNM), Freddie Mac (FRE), and the banks before their liquidity over-leveraged credit crisis started unfolding onto main-street.

I think the lesson learned here is to always do your homework to prevent future disasters of the situations you get involved in. In this over-loaded information age, it pays to have some high-technology services to help you out with that. I'm buying long on information analysis services in this century for sure.

Buy Long Dun & Bradstreet (DNB)

• Buy Entry: 87.17 to 90.53
• Stop-Loss: 86.80

Take Profit Areas

• 95.67 to 98.24
• 98.45 to 100.10
• 101.12 to 102.82
• 107.32 to 109.12
• 125.16 to 127.26

The fundamental story behind Dun & Bradstreet is, to say the least, information. And in this age of mega amounts of information, companies like this provide a great service of weeding out the dis-information in information.

After running a stock valuation based on all of DNB’s current fundamental numbers, the output on fair value is $130.00 per share. I think I forgot to input into the valuation model that there’s a major liquidity and financial markets crisis going on right now.

Its three main competitors are Axiom (ACXM), Equifax (EFX), and InfoGroup (IUSA). I see DNB as an attractive low risk 3:1 reward buy right now for at least a short to intermediate term trade.

click to enlarge

Disclosure: Long

Comments

[Urbane Gori...:]

Don't think I'm interested in DNB .... But I really appreciate the stop that you've listed... A lot of blog rage on about how such-n-such a stock is 'great value' right now, but neglect the effort you just provided.... jegan ;-)

2008 Oct 06 10:11 PM

[Michael Mic...:]

Stopped out early in DNB with the bloodiest market sell-off over the week we've ever seen. Stopped out on all our positions last week. Is a turn around in the offering or is it a dead cat bounce being served up? Or worse, more sell-off? Stay tuned! www.invest2success.com

2008 Oct 11 07:32 PM