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

Zacks is promoting its Focus List, a 50-stock portfolio designed for long-term outperformance, which has historically generated a cumulative return of 2,519.23% from February 1996 to March 2021, significantly outpacing the S&P 500's 854.95% over the same period. The selection methodology relies heavily on identifying companies with upward earnings estimate revisions and strong Zacks Ranks. As a case study, MSCI Inc. (MSCI) has seen its shares increase 249.27% since its inclusion on the Focus List in October 2018, with recent analyst revisions boosting its fiscal 2025 earnings estimates and projecting 13% earnings growth for the current fiscal year.

Analysis

The Zacks Focus List presents a compelling long-term investment strategy, having significantly outperformed the broader market with a cumulative return of 2,519.23% from February 1996 to March 2021, compared to the S&P 500's 854.95%. This outperformance is attributed to its methodology, which prioritizes stocks with strong Zacks Ranks (#1 or #2) and positive earnings estimate revisions, a key indicator of future price momentum. In 2020 alone, the Focus List generated an annualized return of 13.85%, surpassing the S&P 500's 9.38%.

MSCI Inc. (MSCI) serves as a strong case study for the Focus List's efficacy, with its shares appreciating 249.27% from $166.96 to $583.14 since its inclusion on October 10, 2018. This substantial gain underscores the potential for significant capital appreciation when identifying companies with improving fundamentals.

Despite MSCI currently holding a Zacks Rank of #3 (Hold), recent analyst activity remains positive. Three analysts have revised their fiscal 2025 earnings estimates higher in the past 60 days, leading to a $0.1 increase in the Zacks Consensus Estimate to $17.17. Furthermore, MSCI boasts an average earnings surprise of 2.9% and is projected to achieve 13% earnings growth for the current fiscal year, indicating continued operational strength and potential for further upside.

Key Decisions for Investors

• Investors should analyze the Zacks Focus List's methodology, particularly its reliance on earnings estimate revisions, as a potential framework for identifying long-term growth opportunities.
• For MSCI, the recent upward revisions to fiscal 2025 earnings estimates and projected 13% earnings growth warrant continued monitoring, despite its current 'Hold' rating, as these factors could signal sustained fundamental strength.
• Consider integrating a similar earnings revision-centric screening process into existing quantitative models or using the Focus List as a source for high-conviction long ideas, while conducting independent due diligence on individual selections.