The research that investment pros use to analyze stocks doesn't come cheap. Subscribers of FactSet Research Systems know this. The data supplier, which does business with banks, money managers and brokerage firms, charges about $50,000 annually for a basic subscription. FactSet trolls more than 200 databases from research firms, stock exchanges and other sources and then repackages the data as a single online source of information on thousands of companies.
The Norwalk, Conn., company is busily building an empire. Through acquisitions, the company is expanding its business overseas and reducing its dependence on third-party data providers. FactSet (symbol FDS), has also been boosting subscriptions stateside -- and signing current subscribers up for more services at higher charges. These moves should "continue to drive growth for the foreseeable future," Zacks Equity Research analyst Steve Biggs wrote in a note to clients Friday. Biggs rates FactSet shares a "buy" with a six-month target price of $55. The stock, up 27% over the past year, closed Friday at $43.
One of the largest potential sources of FactSet's future revenue growth is a product that helps money managers analyze client portfolios. Portfolio Managers Workstation allows users to easily view the valuation and trading history of a portfolio's holdings, as well as measure its performance in relation to various benchmarks. FactSet recently partnered with MSCI Barra, a provider of benchmark indices, to enhance the product by using Barra's stock analytics. Biggs says Workstation will help FactSet maintain its 95% client retention rate. "Portfolio Managers Workstation is a unique product with high barriers to entry for would-be competitors because of extensive product development and strong client relationships," he writes.
From just $107.88 $24.99 for Kiplinger Personal Finance
Become a smarter, better informed investor. Subscribe from just $107.88 $24.99, plus get up to 4 Special Issues
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
International sales are another growth driver for FactSet. In the fiscal year that ended August 2005, the company sold $92 million in overseas subscriptions, up from $51 million in the previous fiscal year. The trend has continued so far this year. In the third quarter, which ended May 31, revenue grew 39% in Europe, and 32% in Asia.
FactSet has posted 39 straight quarters of revenue growth. During the third quarter of FactSet's 2006 fiscal year, the company reported revenue of $99 million, up 25% from the year-earlier period. Income rose 13%, to $31 million. The company, which will announce results for the fourth quarter of its fiscal year on September 19, expects revenue of $102 million to $105 million for the period.
FactSet trades at 24 times the $1.83 per share that analysts expect the company to earn in the fiscal year that ends in August 2007, according to Thomson First Call. That would be a gain of 17% from the $1.56 per share that analysts expect the company to earn in the current fiscal year.
-
We're retired and mortgage-free, but he wants to downsize.We've paid off our mortgage, have $970K in savings and $5K each month from Social Security. Kiplinger asked wealth planners for advice.
-
How to Avoid Feeling Too Guilty to Spend in RetirementAre you living below your means in retirement because you fear not having enough to leave to your kids? Here's how to get over that.
-
Strategies for Women to Maximize Social Security BenefitsWomen often are paid less than men and live longer, so it's critical that they know their Social Security options to ensure they claim what they're entitled to.
-
If You'd Put $1,000 Into Lowe's Stock 20 Years Ago, Here's What You'd Have TodayLowe's stock has delivered disappointing returns recently, but it's been a great holding for truly patient investors.
-
If You'd Put $1,000 Into 3M Stock 20 Years Ago, Here's What You'd Have TodayMMM stock has been a pit of despair for truly long-term shareholders.
-
If You'd Put $1,000 Into Coca-Cola Stock 20 Years Ago, Here's What You'd Have TodayEven with its reliable dividend growth and generous stock buybacks, Coca-Cola has underperformed the broad market in the long term.
-
If You Put $1,000 into Qualcomm Stock 20 Years Ago, Here's What You Would Have TodayQualcomm stock has been a big disappointment for truly long-term investors.
-
If You'd Put $1,000 Into Home Depot Stock 20 Years Ago, Here's What You'd Have TodayHome Depot stock has been a buy-and-hold banger for truly long-term investors.
-
What the Rich Know About Investing That You Don'tPeople like Warren Buffett become people like Warren Buffett by following basic rules and being disciplined. Here's how to accumulate real wealth.
-
If You'd Put $1,000 Into Bank of America Stock 20 Years Ago, Here's What You'd Have TodayBank of America stock has been a massive buy-and-hold bust.
-
If You'd Put $1,000 Into Oracle Stock 20 Years Ago, Here's What You'd Have TodayORCL Oracle stock has been an outstanding buy-and-hold bet for decades.
