Morningstar, Inc. (MORN), Thomson Reuters Corporation (USA) (TRI): A Cautious Outlook for These Investment Data Providers

Analysts’ mean target prices suggest a 6.5% downside for Thomson Reuters and 10.5% downside for FactSet Research Systems Inc. (NYSE:FDS). These estimates reflect the underlying softness of the sector. The combination of cautiousness among retail investors and cost-cutting measures at big firms is not good for selling financial data.

My take here is that this trend will most likely continue. Despite the fact that retail investors are returning to the market, they will likely stay cautious when it comes to purchasing external products. Brokerage houses provide free basic research, and “free” is a powerful competitor. As for financial companies like banks and hedge funds, they have shown no sign of increasing their expenses. Almost every bank has actually announced additional money-saving measures.

Bottom line
In my opinion, all three stocks are overvalued. I do not see where the growth would come from to justify the valuation of these stocks. Thomson Reuters is in a better position with a cheaper valuation and a dividend that yields 3.71%. FactSet and Morningstar, Inc. (NASDAQ:MORN) are bleak from the income perspective, with 1.27% and 0.64% yields, respectively.

The environment suggests growth would be mostly anemic for these companies. As a result, they are likely to perform in line with the S&P 500. This isn’t ideal for most investors; after all, you are searching for outperformers, aren’t you?

The article A Cautious Outlook for These Investment Data Providers originally appeared on Fool.com is written by Vladimir Zernov.

Vladimir Zernov has no position in any stocks mentioned. The Motley Fool recommends FactSet Research Systems (NYSE:FDS) and Morningstar.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

Dividend Stock Alert - Billionaire Robbins' Top Dividend Idea With 70% Upside Potential

Get Paid 3.5% Per Year While Waiting For The Stock Appreciate 70%

Larry Robbins' Glenview Capital Opportunity Fund returned 101.7% in 2013 and Robbins personally made $750 million. The same fund returned 25.3% in 2014. In this FREE REPORT we will share Robbins' top dividend idea that yields 3.5% and has been increasing its dividends for 39 consecutive years. Robbins thinks the stock has the potential to appreciate 70%.

This is a FREE report from Insider Monkey. Credit Card is NOT required.
Click here to Read Comments
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 74 percentage points in 2.5 years. Our beta is only 1.2 (download a FREE newsletter and see the details inside)

Lists

Best Selling Magazines in the World

Shortest People in History

The Most Celebrated Holidays in the World

Most Expensive Handbag Brands in the World

Top Selling Comic Book Issues of this Century

The Most Powerful Women in Politics

Best Paid DJs

Most Rebellious Female Artists

Best Paid TV Actresses of 2014

Best Paid Actors of 2014

Most Expensive Horses in the World

Tallest People Ever

Most Encouraging Feminist Celebrities

Best Paid Supermodels of 2014

Top 10 Suburbs for Retirement in 2015

10 Wealthiest Cities in America

Top 10 TED Talks for Entrepreneurs

Best TED Talks on Education

25 Most Dangerous Places to Live in America

Top 10 Ski Resorts in the United States – 2014 List

Top 10 Most Remote Places in the World

Most Visited Museums in the United States

Wealthiest Photographers in the World

Most Famous Gay Athletes

The World’s Most Famous Circuses

Best Hair Stylists

Most Popular NASCAR Drivers

The Best Romance Movies of all Time

The Most Wanted Drug Lords

The Oldest Money Managers

The Greatest Directors in the World

Largest Animals in the World

World’s Most Expensive Desserts

Best Selling Comic Books of All Time

A-list Actors who Sabotaged Their Career

Rappers With a College Degree

The Best Jazz Albums of all Time

The Most Influential Jazz Musicians

The World’s Most Famous Photographers

The Best Oscar-Winning Songs

Most Influential Choreographers Ever

Most Expensive Department Stores in the World

The Most Expensive Stolen Paintings in the World

The World’s Most Expensive Teas

Top Oscar Record Holders

The Most Expensive Flowers in the World

Countries With a Booming Film Industry

Most Expensive Cupcakes in the World

Uncommon European Escapes

The Most Stolen Artists in History

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 129% in 2.5 years!! Wondering How?

Download a complete edition of our newsletter for free!