No. of Recommendations: 0
He also bought MSCI, MCO, HRB.
He bought equals amounts around $50 million of MSCI,SPGI and HRB and smaller amount of MCO.
HRB is a tax prep company, the other three are financial services company which earn fees for providing ratings and other services from proprietary data and software. Historically these companies had strong moats, are well entrenched and earn high returns on capital, and consequently have high valuations. MCO and SPGI typically trade at PE multiples in the mid 30s.
They were all hit hard last quarter by fears that new competitors using AI tools could replace their expensive services and products.
Both MSCI and SPGI are now trading at forward PEs in the high 20s. So if you believe AI tools won’t damage them, then they may be undervalued. Obviously Li Lu is in that camp.
Interestingly Li Lu sold BAC, presumably to pay for his new positions.
