FactSet Research Systems: Financial information for the business community

Effective business decisions always require precise data and frequently require lots of it. When the data needed are financial in nature, there is a firm in Norwalk, Connecticut that has you covered on both precision and volume.

FactSet Research Systems (NYSE:FDS) provides financial and economic information on tens of thousands of companies worldwide. The firm offers data from hundreds of databases, focusing on such areas as broker research, financial summaries and newswires. The company also provides software for use in downloading, manipulating and presenting financial data for analysis. Clients include investment managers, bankers, lawyers and corporations. The firm employs over 1,000 people in North America, Europe and the Pacific Rim.

FactSet pleased investors last week, when it reported fiscal Q2 EPS of 49 cents (ex-items) and revenues of $116.3 million. Analysts had been looking for 48 cents and $113.9 million. Management also predicted Q3 revenues of $118-$121 million, versus Street consensus of $117.86 million. The Board of Directors approved doubling the quarterly cash dividend and declared an expansion of the existing share repurchase program by an additional $100 million. The news kept the issue cycling through a positive five-week trading channel. The price is currently consolidating near the base of that channel, where oversold Momentum, CCI, Stochastic and MACD technical parameters suggest the potential for a rise back toward the top. The approximate correspondence of the stock's 50-day moving average to the base of the channel backs the rebound notion.

Brokers recommend FDS with two "strong buys", two "buys" and four "holds". Analysts expect a nineteen percent average annual growth rate, through the next five years. The FDS Price to Free Cash Flow ratio (36.67), Operating Margin (32.02%), Net Profit Margin (22.08%), Return on Assets (21.45%), Return on Investment (25.36%) and Return on Equity (26.74%) compare favorably with industry, sector and S&P 500 averages.

Institutional investors hold about 80 percent of the outstanding shares. The stock is one of those used to calculate the S&P 600 SmallCap Index. Over the past 52 weeks, it has traded between $41.20 and $68.13. A stop-loss of $55.00 looks good here.

Larry Schutts is a contributing editor for Theflyonthewall.com and the Vice-President of Stockwinners.com.