What Actually Happened With MSCI?
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- čas přidán 25. 07. 2024
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Earnings season has started, and two of my portfolio companies have already announced. One is MSCI which decided to drop almost 14% in a single day, and the other is Visa who just keeps doing what it’s doing. In this video we go through the earnings reports and dig into what happened with both companies.
00:00 What happened with MSCI?
07:50 Visa is so boring and that’s so great
*I am not a licensed professional or a financial advisor. This content should not be taken as financial advice. It is meant for educational and entertainment purposes only. All opinions and perspectives are based on my own personal financial situation, experiences, and goals. Please ensure that you do your own due diligence before making financial decisions and/or meet with a professional. Links above include affiliate links, which means I may receive a commission at no additional cost to you.
Great review of compounding machines. MSCI has a 10 year average annual return 29.56% (10 bagger in 10 years). Turned a $10k investment into $142k
Visa turned a onetime investment of $10k into $53k over the last decade (CAGR 17.85%)
Was waiting to see your analysis on this, it’s been quite the week! Heavily considered buying in when it dipped after earnings, but didn’t have the excess capital to build a substantial position plus I already hold a large position in SPGI as well as smaller positions in V and MA
Same here. Visa is one of my favorite stock to own. My biggest winner so far is Amex.
Amex has been great!
Idk if this matters. I work for the federal government, for USA. And for the TSP's International fund will be switching to an MSCI index this year. I don't know when that will happen, all tsp is saying is sometimw this year. But it may not matter since the TSP has its own in house share price/mutual fund and is tied to an index, but Blackrock and state street run the TSP. Thought I would throw that out there.
Nice! I'm curious to see how / if they bounce back next quarter. If it truly is a one-time issue, they'll be perfectly fine. If some of those trends continue in the wrong direction then it might be something to start worrying about.
Wait, this has nothing to do with the C fund right?!?!
Never mind, I see you wrote the international fund. Thanks for the heads up I will zero out that fund on Monday!
Thank you Matt, you're giving me a great perspective.
No worries, glad it's helpful!
Good vid. What’s in the rest of you portfolio please Matt?
I give updates on my full portfolio every month. The most recent one is here - czcams.com/video/TfXbMU15B4Y/video.html
I've made a couple changes (which I talked about in this video) since this update. My next update will be next week (once April is over).
Quick question - when you’ve identified a stock using a screener and then satisfied yourself the fundamentals are sound, how do you gauge the entry price to buy at?
I use a combination of things. I'll run traditional valuation methods (DCF or multiples comparison) but mostly nowadays I look at how the company is trading from a Price to Cash Flow and Price to Earnings perspective compared to their own history.
For example - I bought Amazon in January and a bunch of people said "but it's already doubled why didn't you buy it last year" but if you look at the actual valuation, Amazon was trading at 36 price to cash flow in January 2022 and an 18 price to cash flow in January 2023. So while the stock was "more expensive" what you got for your money basically double (in terms of cash flows).
So, if they're trading at an attractive range based on their own history and their growth prospects are still acceptable, then it's interesting to me. Hopefully that makes sense.
I got through this in some of my stock analysis videos of how I look at their price to cash flow or earnings history to determine if it's an "acceptable value range" for me to buy. I don't really do price targets anymore.
That's just how I do it though, and it's evolved over time. It's obviously not the only way.
@mattderron really useful. Thank you 🙏
Assume I can find the stock analysis videos in your CZcams channel?
I have a whole playlist where the focus is stock analysis - czcams.com/play/PLBFL5VuIWtg5TrogzDov5VRimutrdruuN.html&si=j-JxixdRScF-vb4M
Also you can find specific valuation examples like in my CAT video: czcams.com/video/QA99Y_oFgU0/video.html
Hi Matt agree Visa is a beast that just keeps doing its thing!
Btw have considered looking at Home Depot and Costco great long term compounders that are boring but also just keep on growing and growing…
I don't have much interest in Home Depot, mainly because I sold Lowe's last year and I consider HD very similar.
Costco is one I evaluated last year and thought it was a great company but I already had Walmart in my portfolio at the time so I didn't look to add it. Clearly it would've been a good add.
In general, I've been shying away from general retail companies, but Costco is obviously a unique case. If / when it decides to come back down closer to 20 P/CF and/or 30 P/E I'll probably take a look at it again.
Nice vídeo thanks! About Visa, what do you think that Mastercard is more worldwide superad than Visa and MA has a lower numbers of stocks. This two reasons make MA lightly more valuable than V? Thank you! 😊 ( Personally I couldn’t decide between both 😅 )
MA is a great company. I personally like Visa better because I use their products personally (don't have MC cards) and I worked with folks at Visa in my corporate career. Really impressed with what they were doing.
I can't fault anyone for choosing MA, it's a great company too.
Put VISA into portfolio awhile back. I had been watching out for it and I appreciated the reviews you had done on company as well. Simple company with continued performance. Keep up the great work Matt...
Nice! Easily one of my favorite stocks.
Matt, seeing the fact that you added on MSCI just before their earnings, would you say now that is a bad idea to make purchases on an earnings result month? Would it be better to just wait always to see if the report might generate a buy opportunity on a stock you are interested in? Thanks for the video.
I don’t time earnings in general. I evaluated MSCI at like $560 and thought it was worth buying. So obviously I would think it’s worth buying at $515 or whatever it was before earnings.
Everyone should do what they’re comfortable with, but I’m not buying them for short term price action. For every MSCI that goes down there’s a GOOGL that goes up.
I personally don’t worry about timing on price, but everyone should do what makes sense for them
For MSCI, whenever there are acquisitions it takes some time for the "economies of scale" to take effect. Economies of scale are cost advantages reaped by companies when production becomes efficient and costs are reduced by eliminating duplicate functions. Companies achieve economies of scale by increasing production and lowering costs. An important part of the lowering of costs is the eventual elimination of duplicate functions. The two companies will have, for instance, HR departments. After management works out the differences in HR, the company won't need the duplicate personnel and will lay off workers that have duplicate functions that the company will no longer need. This happens with any M&A...lots of personnel are eliminated. This takes a little time, so those cost savings will occur as the company evolves into a single company. I feel sorry for the personnel that loses their jobs, but that is the way of world of M&A's...and as an employee of (especially) the acquired company, it is scary. So, for MSCI and any other company going through an M&A, they should see cost savings down the line.
Good points .. hopefully; some natural downsizing through employee turnover (quitting) or retirement.
If I was only able to hold 1 stock, it would be Visa. I've been thinking about consolidating down to it but I like my other positions. (ABNB, AXP, ADBE, SBUX, V)
I love Visa too, I can envision a day when I have much less than 12 stocks (maybe 5-6) and Visa would definitely be in that group
Have had Visa for a while now. Looks pretty stale unless you factor in the dividends. Would wish that there was an easy way to see share performance with dividends. Should be a standard option on the share charts imho (I understand why it is more complicated than just listing the actual share price - but seriously computers have no issue with changing the baseline departure point once selected, so chart should have this function built in).
Seeking Alpha shows this pretty easily. Just go to the Momentum tab and scroll down to "Total Return vs S&P 500" and you can pick whatever date you want to see it from
Hi Matt, just curious. Why Visa instead of Mastercard? I own Mastercard. Just trying to see if Visa has an edge for some reason.
Personal preference. I use their cards (don’t have MC) and in my corporate career I worked in payments and frequently with folks from Visa and other providers. Was always very impressed by the people that worked there and the things they were working on.
MA is a great company though so I can’t fault anyone for picking them either.
@@mattderron Thanks for the response. Just wanted to make sure I was not missing some red flags with Mastercard. Thanks.
Of my two holdings PEP and GOOG I was thinking investors were sleeping on these two. Yes, these two companies did beat their earnings report. V on the other is one I'm not too concerned or worried about. I still think V will continue to grow as I view as a slow growing company even though it's a huge company. You could also say the same with MA too.
For sure, just about anything I say about V can be applied to MA. In terms of viewing it as a "slower grower" I agree with that too. Double digit growth still obviously but probably won't see explosive growth anymore and that's ok.
That's one of the reasons why I needed to transform part of my portfolio. Now Visa is one of the "steady solid growers" instead of one that I need to way outperform.
I was able to pick up 10 shares of MSCI at 450 and today picked up 20 shares of ABBV at 159 after its big melt down, I was so tempted to load up on META yesterday but couldn’t pull the trigger. 😢. Have about enough available cash for one more earnings disaster purchase next week, who will it be?? lol.
lol we’ll see, been some pretty big swings on very large market cap companies this quarter
On April 25th MSCI CEO purchased almost 10 million dollars worth of shares… so clearly he thinks it’s a one time thing and an overreaction 😅 glad I picked up 10 shares on the dip
Yep love Visa, as our portfolio grows I always make sure Visa stays in the top five. The question is: What happened to CAT??? Margins are up, earnings are up??? It is still too rich for me but I just do not understand the rational. I should have bought more last year at 170USD.
I'm going to be doing a similar video like this for GOOGL, CAT, and VLO who all had earnings yesterday. It'll likely be for Monday.
I think CAT is simple - it was up 60% almost straight up since November. They announced revenue guidance to be similar to 2023 (which was a banner year) and expectations were that it would be slightly higher.
Honestly I view this more as a healthy correction of a stock that has been basically up only for 6 months. But I'll see if I find anything else in their report over the weekend.
@@mattderron " I'll see if I find anything else in their report over the weekend"
I am sure you will and I am looking forward to watching that episode. And can you believe Valero at 55$ 3 years ago, wow.
Cheers,
a.
@@Coyotehello VLO is a volatile one that’s why when it was at like a 3-4 P/CF it was a no brainer
Man Poet took off😂 I ate good this week
Wow! That's awesome. I've been enjoying GOOGL's earnings today. Actually all 3 of the Mag 7 I just bought (GOOGL, AMZN, and NVDA) have all been good. I added to NVDA twice since my initial buy and it's in the green even after the initial dump.
i've added Friday when i saw Insiders buying huge pile of stocks!
ESG ruins the business for them (and others, who focuses on this nonsense)!
Yeah I mentioned that in my original video I think. I'm don't think the ESG data / ratings are useful at all, that's why I have it as a risk to monitor for them.
If customers find it useful and it keeps growing revenue, then fine. Time will tell.
MSCI insiders bought $9,502,535.00 worth of shares
VISA insiders sold $9,559,382.00 worth of shares
.....i am just saying......
lol I'm not sure if you understood my previous reply but this video is not comparing MSCI to Visa. I hold both companies in my portfolio and this video was simply reviewing the different earnings reports and stock price moves afterwards.
It seems like you like MSCI and that's cool, but MSCI and Visa are wildly different companies that really don't compete with each other at all. So whatever is happening in one stock is not necessarily telling of anything going on in the other. I hope this makes sense.
Blue chip compounders 📈
Just dipped my toes
in....MSCI?
MSCI Payoutratio 39.47% dividendgrowthrate 22.04% for 5 years. As of 2023, funds worth over 13 trillion US$ were based on MSCI.
Climate Change Score A- Revenue for 2023: 2.53B Netincome: 1.15B (31.94%increase)
MSCI beats VISA here. Its a stock you do not recommond anyone and keep for yourself.
this video isn't comparing the two, but ok
@@mattderron yeah i know. thats just my opinion, it doesnt mean it correct.