Five Stocks That Deserve Closer Attention
The Manual of Ideas submits:
The following five companies are owned by some of the most highly regarded investment managers out there. We believe each company’s shares are worthy of closer consideration and may deliver investment outperformance:
Fair Isaac (FICO) is 20%-owned by Mason Hawkins’ Southeastern Asset Management, which has added to its stake in recent months. Fair Isaac has leveraged the success of the industry-leading FICO credit score brand to create products in related areas and non-financial verticals. These diversification efforts as well as a variable cost structure have dampened the impact of lower demand for high-margin credit scores. FICO continues to be a fundamentally attractive business with low capital intensity, good normalized margins, and a strong competitive position. Longer term, it remains to be seen how successful the FICO score will be in terms of beating back challenges from rival products. We suspect that the brief window of opportunity that opened up for competing products as a result of the credit crisis may be shut before competitors are able to challenge the supremacy of the FICO brand. In any case, with FICO shares trading at a 10+% FCF yield in a still below-normal operating environment, we believe the shares are too cheap to ignore.
Investing, Long Term Investment, stock market | admin March 29, 2010
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