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Here's Why I Am Adding Equifax To My Watch List

Jul. 23, 2015 5:34 PM ETEquifax Inc. (EFX)
William Bias profile picture
William Bias


  • Equifax is a large global player in the realm of risk assessment.
  • Post-recession attitudes demand prudence in evaluating loans and serve as a driver for the company’s fundamentals.
  • Equifax sports strong fundamentals.

It's important for long-term investors to develop a guide for doing their investment research. Over the years I have developed six questions to guide me in my thinking when researching the publicly traded universe. Today let's talk about Equifax (NYSE:EFX).

1.) What does the company do?

When you buy shares in a company you effectively become part owner of that company. Therefore, it's important for an investor to understand what a company sells. Equifax essentially resides in the business of information and analytics. The company is most well-known for its credit reporting services.

Equifax provides credit data to banks, employers, and individuals to help them assess risk. It also provides fraud and identity management, as well as employment verification services. Equifax provides prudent companies or individuals the ability to assess risk within their own business, or personal financial situation, and related to their customers and suppliers.

2.) What do the fundamentals look like?

Investors should also look for companies that grow revenue and free cash flow over the long-term, retaining some of that cash for reinvestment back into the business and for economic hard times. Excellent revenue and free cash flow growth serve as catalysts for superior long-term gains. Equifax expanded its fundamentals at a decent rate over the past five years. Its revenue, net income and free cash flow grew by 42%, 47% and 129%, respectively (see chart below).

EFX Revenue (<a href=

Many factors contributed to Equifax's expansion in fundamentals. Increased economic activity, and the related need for more prudent decision making on potential loans, contributed to the expansion in fundamentals. Moreover, Equifax continues to look for better ways to serve its clientele. Its management isn't afraid to make strategic acquisitions to add to its product portfolio and enhance its market position.

In the most recent quarter, Equifax continues executing well. The company

This article was written by

William Bias profile picture
I have been analyzing stocks since 1992 and a freelance writer since 2012.

Analyst’s Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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