Lindsell Train, an investment management firm noted for its buy-and-hold approach, has piled into shares in Experian (LSE: EXPN). According to the Financial Times, Nick Train said of the deal: “We should have owned Experian years ago and the fault that we didn’t is all mine”.
The highly-rated investment manager reportedly expects that rising demand for Experian’s advanced analytics and data management tools will drive strong growth. Shares in the credit and data company hit an all-time high back in September. With this in mind, should you also buy the shares?
Investing in shares of FTSE 100 company Experian
Just this month, Morgan Stanley upgraded Experian to ‘overweight’ and increased its price target price to £33.30 from £28.20. At the time of writing, the shares are just under £30.
Last month, Experian increased its guidance for second-quarter revenue following stronger trading in July and August. The group stated the upgrade was due to strength in its US mortgages and consumer services.
Overall, it seems that Experian is tapping into the growing demand for data and analytics. This trend is accelerating and will keep on growing. It seems very likely the FTSE 100 company will keep growing along with it.
What are the other shares managers like Train might focus on?
We also know that Train is said to be keen on finding other data and analytics companies to invest in. With Train more active than usual this year with purchases – he’s made three – what other shares could be on his radar?
D4T4, which I’ve covered recently, could be a perfect fit. The only barrier might be its size given it has a market capitalisation of less than £100m. Train tends to be keener to buy more established, larger companies. The LF Lindsell Train UK Equity Fund‘s top three holdings are London Stock Exchange, Unilever,and Diageo.
Nonetheless, other managers with the same thought process but focusing on smaller caps may be keen on D4T4. It certainly looks like a potentially promising investment.
Train may add more to his holding in RELX, which has come under pressure because of Covid-19 and its association with events. But a significant amount of its revenue comes from data services, and he clearly already like the company – it’s the fourth-largest holding in the UK Equity fund. As a buy-and-hold investor he may well see now as a good time to load up on the shares at a cheaper price.
I believe Experian, D4T4 and RELX are all potentially very good investments for the coming months and years. Especially longer term I believe they will all do very well and reward shareholders.
