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MSCI: This Might Be The Most Attractive Business In The World

Jun. 16, 2022 12:40 AM ETMSCI Inc. (MSCI) Stock3 Comments
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  • MSCI is one of the highest-quality companies we have ever analyzed. It has an extraordinary business model, outstanding financials, and impressive growth.
  • MSCI earns a small fee/royalty on ~$16.7 trillion, from ETFs using its indices. As the market continues to go up, its earnings follow without having to reinvest much.
  • Its asset-light business model allows MSCI to return most of its generated cash in the form of dividends and share repurchases.

Business Trends Graphs and charts. Dollar sign with rocket

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Imagine a business where you earned a royalty on the amount of wealth in the world, and as wealth increased you would automatically see your earnings increase as well. You would have to do relatively little to

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Comments (3)

Only weakness is revenue concentration - big customers accounting for large % even if under contract
Mick Research profile picture
"As the market continues to go up, its earnings follow without having to reinvest much."

The market has been going down for a while :)
Mick Research profile picture
"Shares are not the bargain they were when they traded with a P/E of ~17x, but we believe something like the 37x average can be justified by the quality of the business and the consistent growth.

For example, if we look at the last five years we see that revenue growth has averaged ~12%, and it has actually been higher recently.


You could buy something like $UNH or $ANTM, which have a similar growth profile and a much lower P/E.
While they have a different risk profile, their earnings are recession proof.
Or $ADBE, whose gross margins are even higher than $MSCI's. Again, similar expected growth and lower P/E ratio.
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