thomson reuters

Hidden value is one of the key factors we examine when we look for top stocks. A company’s brand name is one good example of an underappreciated asset. Balance sheets often fail to assign any value to brands, even household names that have built up multitudes of loyal customers over the years. Two weeks ago we looked at the value of the brand of Canada’s best known tech company. (View the article here.) Today we examine another company whose strong brand is helping it grow internationally. THOMSON REUTERS CORP. (Toronto symbol TRI; www.thomsonreuters.com) gets 57% of its revenue and 50% of its earnings by selling news and information to professionals in the banking industry. It also sells specialized information products to clients in the legal, accounting and scientific research fields....

THOMSON REUTERS CORP. $31 (Toronto symbol TRI; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 826.5 million; Market cap: $25.6 billion; Price-to-sales ratio: 1.8; Dividend yield: 4.1%; TSINetwork Rating: Above Average; www.thomsonreuters.com) gets 57% of its revenue and 50% of its earnings by selling news and information to professionals in the banking industry. It also sells specialized information products to clients in the legal, accounting and scientific research fields.

The company was already a well-established specialized information provider before it merged with the Reuters news agency in 2008. That deal gave the combined company even more information to sell. It also cut its reliance on North America. Thomson Reuters now gets 57% of its revenue from the Americas, followed by Europe (31%) and Asia (12%).

In addition, the Reuters merger helped the company launch its new Eikon terminals, which deliver real-time news and financial data to securities traders and portfolio managers. Even as the uncertain global economy prompted banks and other financial service businesses to scale back their spending, the number of Eikon users rose 35% in the third quarter of 2012 from the second quarter.

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Hidden value is a key factor we look for in our stock recommendations. A good example of an underappreciated asset is a company’s brand name. Balance sheets often fail to assign any value to brands, even household names that have built up multitudes of loyal customers over the years.

These four companies own some of the best brands in their industries....

The Successful Investor Hotline. Friday, December 14, 2012 Dear client,...

THOMSON REUTERS CORP. $28 (Toronto symbol TRI; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 825.9 million; Market cap: $23.1 billion; Price-to-sales ratio: 1.6; Dividend yield: 4.6%; TSINetwork Rating: Above Average; www.thomsonreuters.com) gets 56% of its revenue and 45% of its earnings by selling news and information to professionals in the banking industry. It also sells specialized information products to clients in the legal, accounting and scientific-research fields.

Slow economic growth and tighter regulations are prompting banks and brokerage firms to cut their spending on information products. Thomson Reuters is also spending more to improve the performance of, and add new features to, its Eikon desktop computer terminals, which deliver news and financial data to traders and portfolio managers.

As a result, the company’s earnings fell 1.8% in the three months ended September 30, 2012, to $445 million from $453 million a year earlier (all amounts except share price and market cap in U.S. dollars). Due to fewer shares outstanding, earnings per share were unchanged at $0.54.

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Consumers continue to rely more on online information sources and less on newspapers and magazines. In response, many publishers are finding new ways to sell their content on the Internet. These three are leading the way, thanks to their strong brands and profitable niche markets. That, along with their ongoing cost cuts, should help them offset lower revenue from their printed products. THOMSON REUTERS CORP. $28 (Toronto symbol TRI; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 825.9 million; Market cap: $23.1 billion; Price-to-sales ratio: 1.6; Dividend yield: 4.6%; TSINetwork Rating: Above Average; www.thomsonreuters.com) gets 56% of its revenue and 45% of its earnings by selling news and information to professionals in the banking industry. It also sells specialized information products to clients in the legal, accounting and scientific-research fields. Slow economic growth and tighter regulations are prompting banks and brokerage firms to cut their spending on information products. Thomson Reuters is also spending more to improve the performance of, and add new features to, its Eikon desktop computer terminals, which deliver news and financial data to traders and portfolio managers....

ENBRIDGE INC., $39.86, Toronto symbol ENB, has finished repairing a leaking pipeline in Wisconsin. This line pumps crude oil from Western Canada to refineries in the U.S. Midwest. However, U.S. regulators have stopped Enbridge from restarting the pipeline until the company submits a new plan outlining its environmental and maintenance procedures. This delay is not likely to have a meaningful impact on Enbridge’s growth. Meanwhile, the company earned $277 million in the three months ended June 30, 2012. That’s up 7.4% from $258 million a year earlier. Earnings per share rose 5.9%, to $0.36 from $0.34, on more shares outstanding....

THOMSON REUTERS CORP. $29 (Toronto symbol TRI; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 829.2 million; Market cap: $24.0 billion; Price-to-sales ratio: 1.7; Dividend yield: 4.5%; TSINetwork Rating: Above Average; www.thomsonreuters.com) is buying FX Alliance Inc. (New York symbol FX), which sells foreign exchange data to banks, portfolio managers and corporations. When the deal closes in the next weeks, it will strengthen Thomson’s electronic-data products.

The $625-million U.S. price is equal to 37% of the $1.7 billion U.S., or $1.98 U.S. a share, that Thomson earned in 2011.

Thomson Reuters is a buy.

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THOMSON REUTERS CORP. $29 (Toronto symbol TRI; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 829.2 million; Market cap: $24.0 billion; Price-to-sales ratio: 1.7; Dividend yield: 4.5%; TSINetwork Rating: Above Average; www.thomsonreuters.com) is buying FX Alliance Inc. (New York symbol FX), which sells foreign exchange data to banks, portfolio managers and corporations. When the deal closes in the next weeks, it will strengthen Thomson’s electronic-data products. The $625-million U.S. price is equal to 37% of the $1.7 billion U.S., or $1.98 U.S. a share, that Thomson earned in 2011. Thomson Reuters is a buy.

Media companies continue to look for ways to cut their costs in response to rising competition from free information on the Internet. In some cases, the reductions are drastic. Recently, Postmedia’s Ottawa Citizen, Edmonton Journal and Calgary Herald all dropped their Sunday editions. But one Canadian media stock with a more specialized clientele aims to remain profitable and maintain its dividend thanks to a major cost cutting measure. The company has also been expanding its presence in international markets....