Why MSCI (MSCI) is a Top Stock for the Long-Term

Zacks' Focus List, a curated portfolio of 50 stocks, has demonstrably outperformed the S&P 500, with a 13.85% annualized gain in 2020 versus the S&P's 9.38%, and a cumulative return of 2,519.23% since February 1996 compared to the S&P's 854.95%. This performance is primarily attributed to a methodology that selects stocks from Zacks' #1 or #2 ranked companies, emphasizing those experiencing upward earnings estimate revisions, which are believed to precede price momentum. The strategy's efficacy is underscored by examples like MSCI, which saw a 248.64% increase since its Focus List inclusion.

Analysis

The Zacks Focus List, a 50-stock portfolio, has demonstrated significant historical outperformance against the S&P 500, recording a cumulative return of 2,519.23% versus the index's 854.95% between February 1996 and March 2021. The strategy's foundation is its quantitative methodology, which selects stocks from Zacks' #1 (Strong Buy) or #2 (Buy) ranks, prioritizing companies experiencing upward earnings estimate revisions. This approach is based on the premise that positive revisions from brokerage analysts often precede stock price momentum. The case of MSCI Inc. (MSCI) is presented as evidence of this strategy's efficacy; since its addition to the list on October 10, 2018, the stock has appreciated 248.64%. Supporting this, MSCI's fundamentals appear robust, with seven analysts revising fiscal 2024 earnings estimates upward in the last 60 days, lifting the consensus estimate to $14.79. Furthermore, the company shows a projected earnings growth of 9.4% for the current fiscal year and has a history of delivering an average earnings surprise of 5%.

Key Decisions for Investors

• Investors should consider that strategies prioritizing positive earnings estimate revisions, such as the one described, have shown strong historical outperformance, making this a key factor to screen for in quantitative models.
• For current or prospective MSCI investors, the recent seven upward analyst revisions and a projected 9.4% earnings growth signal continued fundamental strength, warranting a closer look despite its current Zacks #3 (Hold) rating.
• Given that the source is promotional, it is prudent to perform independent due diligence on the underlying fundamentals of any featured stock, as past performance and proprietary rankings are not guarantees of future returns.