Moody’s Corp. (MCO) Musings
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?