We have a very small position in Moody’s Corp. (MCO), 0.8% of our US portfolio. In my continuing efforts to trim our portfolio and return to our concentrated way all small positions are under the microscope. A less than one percent position is a waste of my time. So it’s either put up or shut up, or in this case, buy more or sell.

Would I buy more Moody’s today? No. MCO is not one of my best companies and is not a great value proposition. The long term story of Moody’s is still interesting and when credit markets flourish the pent up demand for credit could see Moody’s consistently beating estimates.

• Current Price $25.46
• Earnings out 29-Apr-09 BMO, average est $0.34 with range of $0.28-0.39.
• Share price in strong uptrend since March 6 low of $15.57, but hey what’s not?
• Margins and returns are high, Moody’s are certainly a fantastic looking business.
• Great cash flow.
• Balance sheet highlights the leverage they now employ.
• S&P have a Hold and 12 month price target of $23.
• Annual dividend of $0.40 is a low yield of 1.6% 

Moody’s is on my sell list. May $25 Calls, MCOEE, $2.40-2.45. Do you see it differently?

Related posts:

1. Sitting down with Lear Corp. (LEA)
2. Leucadia National Corp. (LUK) Better Than Berkshire
3. Speed Musings on CSL, SNDK, HHL and PTM
4. CompuCredit Corp. (CCRT) Insider Buying
5. Leucadia National Corp. (LUK) 2008 Report