IHS Inc. (IHS), Nielsen Hldg NV (NLSN), DigitalGlobe Inc (DGI): Big Value In Information Services

Page 1 of 2

IHS Inc. (NYSE:IHS) recently announced that it is buying privately held R.L. Polk for $1.4 billion. Polk’s Carfax service is a mainstay in the auto industry and materially bolsters IHS’ auto offerings. The price tag shows just how valuable information can be. Investors should also look at Nielsen Hldg NV (NYSE:NLSN) and DigitalGlobe Inc (NYSE:DGI).

IHS Inc (NYSE:IHS)

Buying a Research Team

The most expensive part of creating a research-based business is creating the systems to collect, analyze, and distribute the research. Once that’s done, however, a single information product can be sold to multiple customers. And, if done well, the information can be sliced and diced into new products.

So it isn’t surprising to see a company like IHS Inc. (NYSE:IHS), which offers research-based services to industries as diverse as coal and electronics, step in and pay big bucks to buy the company behind Carfax. That brand is established and has a solid infrastructure in place. Although the deal was the result of an auction, which could mean IHS Inc. (NYSE:IHS) paid more than it otherwise might have liked, the service fits right in with IHS’ broader business.

And IHS Inc. (NYSE:IHS) has been performing well for a decade, with the top line going from about $350 million in 2003 to about $1.5 billion last year. In fact, sales advanced right through the recession. Earnings have been a bit more volatile, but have been over $1.50 a share since 2008 and were nearly $2.40 in 2012. The shares have been on a fairly steady ascent since late 2009, so IHS Inc. (NYSE:IHS) is probably most appropriate for growth investors.

Other Options

That said, the billion dollar purchase just goes to show the value that information services have hidden beneath the seemingly simple offering of information. For example, Nielsen Hldg NV (NYSE:NLSN) is another research specialist best known for its industry standard television ratings. That business makes up about a third of the top line. The company’s bigger business is monitoring what people buy, which accounts for around two thirds of revenues.

The company operates in both developed and developing markets, with exposure to over 100 countries. The most valuable part of what Nielsen Hldg NV (NYSE:NLSN) offers is a trusted brand and the infrastructure needed to accurately monitor consumer behavior. This allows customers to outsource the important market research step with confidence.

Nielsen Hldg NV (NYSE:NLSN), however, ran into financial troubles in the mid-2000s and was taken private in 2006. It came public again in mid-2011, so it has a short trading history. That said, it had more than $5.6 billion in revenue in 2012 and looks to be on a much more solid footing today. It might be a good time to get aboard while the market is still trying to assess Nielsen Hldg NV (NYSE:NLSN)’s business prospects.

Page 1 of 2
blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months Click to see monthly returns in table format!

Lists

5 Retirement Mistakes To Avoid (and Einstein’s Famous Quote)

11 Smartest People in the World

6 Films About the Financial World You Need To Watch (While “The Wolf” is Not Around)

Warren Buffett and Billionaires Are Crazy About These 7 Stocks

The Top 10 States With Fastest Internet Speeds

10 Best Places to Visit in USA in August

Top 10 Cities to Visit Before You Die

Top 10 Genetically Modified Food In the US

15 Highest Grossing Movies Opening Weekend

5 Best Poker Books For Beginners

10 Strategies Hedge Funds Use to Make Huge Returns

Top 10 Fast Food Franchises to Buy

10 Best Places to Visit in Canada

Best Summer Jobs for Teachers

10 Youngest Hedge Fund Billionaires

Top 10 One Hit Wonders of the 90s

Fastest Growing Cities In America

Top 10 U.S. Cities for Freelancers

Top 9 Most Popular Free iPhone Apps

Top 10 Least Expensive Private Business Schools in the US

Top 15 Most Expensive Countries in the World – 2014

Top Businesses to Invest In

Top 5 Things You Might Be Doing Wrong With Your Business

Top 5 Strategic Technology Trends in 2014

Top Rags to Riches Stories

Parenting Behavior That Promotes Future Leaders

Top 5 Mistakes Made by Small Businesses

Top 5 Most Common and Potentially Devastating Financial Blunders

Top 5 Highest Paying Jobs for Web Designers

Top 6 Most Respected Professions that Also Pay Well

Top 5 Pitfalls Investors Should Avoid

Top 6 Lawyers and Policy Makers Under 30

Top 6 New Year’s Resolutions for Entrepreneurs

Top 7 Locations to Check in on Facebook

Top 5 Mistakes made by Rookie eBay Sellers

Top 7 eBook Publishers in 2013

Top 6 Health Industry Trends in 2014

5 Lessons for Entrepreneurs from Seth Godin

Top 5 Success Tips from Jordan Belfort – the Wolf of Wall Street

Best Master’s in Finance Degree Programs

Top 6 Earning Celebrities Over 50

The most expensive sports to play

Top 7 Earning Celebrities Under 25

Best 7 Online Courses to Take: Free Finance MOOCs

Top 6 Bad Habits that Promote Failure

20 Most Valuable Soccer Teams in the World in 2013

12 Most Expensive Countries for Foreign Students

Top 30 Most Influential Women in the World

Top 20 Most Expensive New Year Eve Shows

Top 5 Best Vocational Careers

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!