Moodys Corporation is a highly profitable cash cow operating in an oligopoly with powerful long term growth driven by regulatory requirements. It has an extremely high retention rate with clients typically staying for decades, a capital light model and low capex requirements.

Moody's is the market leader out of the three rating agencies (S&P/Fitch) in an industry facing strong long term tailwinds from increasing regulation boosting demand for rating agency services and analytics as well as accelerating short term tailwinds from an improving economy and M&A activity.

Q4 revenue growth was 24% with healthy guidance for continued double digit growth coupled with tight cost controls expected to see strong EPS growth. That growth would have been about 20% but once off tax reductions should see EPS jump almost 30% to $7.70.

The stock is up 50% over the past year and some say it is too expensive but with long term growth drivers and a forward PE of 22 I think it looks very attractive.

This post is not a recommendation to buy or sell any security or derivative. Stocks are not suitable for all investors. Please do your own research.

Submitted February 17, 2018 at 01:56AM by InterestingNews1 http://ift.tt/2BBrbMc