MSCI closed at $568.01 on October 12 and has returned 2.8% over the last six months, trailing the 21.2% return of the Insider Monkey Billionaire Index and 14.0% for the State Street SPDR S&P 500 ETF Trust. The article argues MSCI's most profitable product is its index list, since funds pay license fees to track it, which lets the company keep 56.30% of revenue as operating profit. Revenue grew 12.20% in the latest quarter, but book value is negative $36.99 per share because the company bought back stock with borrowed money, leaving $6.54 billion of debt. The main threat is price pressure from index funds competing hard on cost. The article calls MSCI expensive on most measures at 24.69 times next year's expected earnings, but reasonable for a standard that almost nobody can attack.
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