lundi 13 septembre 2021

Intuit (INTU): A great company

Intuit (INTU) is an excellent example of the kind of company that everybody should follow. I've never been a shareholder, but I've followed that company for years. And one day, I might buy shares. 

It's a very simple company: they produce tax softwares for individuals, companies and accountants. Plus, they own Credit Karma (on which you can see your credit score). And today, we learn that they buy Mailchimp (a kind of Shopify) for 12 billion dollars. It's a huge acquisition. 

Here's what's great with this company:

First of all, it operates in a boring industry where fad has absolutely no importance (contrary to clothes, to restaurants, to technology). Nobody talks about trends related to tax software. Then, it's a dominant company. It's not a monopoly, but it's a bit like Microsoft: it's the biggest in the industry. 

Everybody or so buys such a software every year. As the population grows, that company has more and more customers. 

Intuit has a very small debt. Their cash flows are growing, year after year, like very few companies can do (EPS growth is good, but it doesn't show everything while cash flow growth is more revealing of the greatness of a company). 

Plus, their profits margins are great (21%) and their ROE is 27. Very few companies have that kind of margins and ROE. 

To see how great it is, you have to analyze about 100 companies. Then, you'll see that Intuit is among the best 5%. 

All you have to decide is if 40 times next year's earnings is too expensive for you. 

1 commentaire:

  1. Thanks, it seems like a great company to follow.
    Unfortunately, the market seems to be already aware of it. Too expensive for me right now.