Why Moody's Is Poised to Pull Back

Brian Pacampara, The Motley Fool
Updated

Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, credit rating agency has received a distressing two-star ranking.

With that in mind, let's take a closer look at Moody's and see what CAPS investors are saying about the stock right now.

Moody's

Headquarters (founded)

New York, N.Y. (1900)

Market Cap

$13.4 billion

Industry

Specialized finance

Trailing-12-Month Revenue

$2.7 billion

Management

CEO Raymond McDaniel, Jr. (since 2005)
CFO Linda Huber (since 2005)

Return on Capital (average, past 3 years)

52.3%

Cash / Debt

$1.8 billion / $1.7 billion

Dividend Yield

1.5%

Competitors

Dun & Bradstreet
Fitch Ratings
Standard & Poor's


Sources: S&P Capital IQ and Motley Fool CAPS.

On CAPS, 11% of the 192 members who have rated Moody's believe the stock will underperform the S&P 500 going forward.

Just yesterday, one of those bears, fellow Fool Jason Moser (TMFJMo), succinctly summed up the underperform case for our community:

Scary part is this could very well outperform given our unfortunate dependence on these ratings agencies. Still, long term money will fare better elsewhere, too much "black box" and not enough transparency in this biz. Plus, I just gave it the red thumb of death on Investor Beat today, so I'm sticking with my guns.

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The article Why Moody's Is Poised to Pull Back originally appeared on Fool.com.

Fool contributor Brian Pacampara has no position in any stocks mentioned. The Motley Fool recommends Moody's. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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