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RELX any opinions?

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TheMotorcycleBoy
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RELX any opinions?

#200746

Postby TheMotorcycleBoy » February 12th, 2019, 9:06 am

I'm curious about this firm. Their ROCE and OM numbers seem to be quite good. But what about their actual business? Do they host online (and a dwindling % of paper) scientific publications? Why is this a desirable, if it is, (the numbers may well point this way) business?

But are they not "more than an online newagent?" Do they do this "big data" thing? Never quite understand what exactly that is...despite working in IT/Tech myself. So do they also employ researchers and have an array of computing resources analysing data?

Genuinely interested in researching this one, I did read the wordy front part of most recent Annual report, but would love to hear some more.

thanks Matt

TheMotorcycleBoy
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Re: RELX any opinions?

#200751

Postby TheMotorcycleBoy » February 12th, 2019, 9:11 am

Just a few links

https://seekingalpha.com/article/350467 ... rice-right
https://www.forbes.com/sites/avaseave/2 ... 37b2c6b7da
https://www.sharesmagazine.co.uk/articl ... e-ftse-100

sorry I've not properly looked at them.....I've got to dash out right now....

more soon, Matt

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Re: RELX any opinions?

#201218

Postby TheMotorcycleBoy » February 14th, 2019, 6:03 am

Surely after nearly 48 hours and 100+ views, someone must have an opinion on this FTSE100 occupant worth spending a couple of minutes to type up! :lol:

Yes RELX (REL) provide information to others. Not classic IT services, but information as collections of "facts" for legal, scientific, educational and commercial clients. Apparently it's a big business......but is it a classic Warren Buffet (easy to understand) business? (I doubt it).

They have healthy OMs and a demonstrable growing dividend policy. However they also have a stack of debt (Net debt/EBITDA > 2.1) and I'm guessing that their balance sheet has plenty of Goodwill and Intangibles on it.

So do people think they make a good investment? For income or growth or both?

thanks Matt
Last edited by TheMotorcycleBoy on February 14th, 2019, 6:11 am, edited 2 times in total.

TheMotorcycleBoy
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Re: RELX any opinions?

#201219

Postby TheMotorcycleBoy » February 14th, 2019, 6:10 am

I've not looked at their accounts in much depth, but from a quick glance, not that this website's opinion is gospel, it looks like they are quite pricey right now:

https://www.marketscreener.com/RELX-9590187/consensus/

Matt

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Re: RELX any opinions?

#201226

Postby YeeWo » February 14th, 2019, 7:38 am

SWMBO works for RELX! Brands such as The Lancet are owned by RELX and have the definite Economic Moat of pricing power and reputation. The publishing business is going very much online and various portals and resources are available to paying niche medical groups as required. Beyond publications like The Lancet though the rise of free online knowledge portals is clearly a threat. Other businesses such as Exhibitions and other sectors such as Financial Data are something I know a lot less about. Thomson Reuters has sold it's Financial Business into a JV with PE, which may indicate the sector is stretched or perhaps that their business is being prepared for sale? A potential RELX acquisition perhaps?
A global internal-market seems to operate within RELX, whereby work seems to be done in the best value location that is acceptable to end client. This does seem awful as it's initially described to me, however it seems this is the way most MNC's operate.
RELX is acquiring businesses on a regular basis, all of which potentially can be globally scaled.
I've held the stock, acquired for 400p-ish via a SAYE scheme, for years and years - it's 5% of my portfolio and has generated an XIRR of circa 20% :shock:
Definitely expensive as I type, 1726p, but you just never know earnings may continue growing and one of acquisitions may be a real gusher!

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Re: RELX any opinions?

#201229

Postby TheMotorcycleBoy » February 14th, 2019, 8:09 am

YeeWo wrote:SWMBO works for RELX! Brands such as The Lancet are owned by RELX and have the definite Economic Moat of pricing power and reputation. The publishing business is going very much online and various portals and resources are available to paying niche medical groups as required. Beyond publications like The Lancet though the rise of free online knowledge portals is clearly a threat. Other businesses such as Exhibitions and other sectors such as Financial Data are something I know a lot less about. Thomson Reuters has sold it's Financial Business into a JV with PE, which may indicate the sector is stretched or perhaps that their business is being prepared for sale? A potential RELX acquisition perhaps?
A global internal-market seems to operate within RELX, whereby work seems to be done in the best value location that is acceptable to end client. This does seem awful as it's initially described to me, however it seems this is the way most MNC's operate.
RELX is acquiring businesses on a regular basis, all of which potentially can be globally scaled.
I've held the stock, acquired for 400p-ish via a SAYE scheme, for years and years - it's 5% of my portfolio and has generated an XIRR of circa 20% :shock:
Definitely expensive as I type, 1726p, but you just never know earnings may continue growing and one of acquisitions may be a real gusher!

Thanks very much, YeeWo, for this.

So indeed a potentially very valuable investment. But looking pricey at present. Probably one to put on the back burner I think, to perhaps grab in a dip?

At first the debt levels looked quite high, but I should probably compare this with some of our other holdings (e.g. nat grid NG. and imp brands IMB) to get a proper perspective, as to how scared or not I need to be about this.

Matt

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Re: RELX any opinions?

#201248

Postby simoan » February 14th, 2019, 9:19 am

This company is not on my radar. Never has been. The good news is it passes 11 out of 13 tests in my Quality filter. The bad news is it fails the "Elephant in the room" test with net debt nearly 4x net profit. Of no interest to me whatsoever.

Si

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Re: RELX any opinions?

#201257

Postby SalvorHardin » February 14th, 2019, 9:43 am

Relx is a company I've never really looked at in depth, not even when it was called "Reed Elsevier".

I own quite a few Relx shares indirectly as it is the second biggest shareholding in the Finsbury Growth and Income Investment Trust (my largest investment trust holding by quite some way), which is managed by Nick Train of Lindsell Train. I've long held the view that if Nick Train holds a company's shares then it's probably worth investigating a bit further.

Relx isn't just an online newsagent; a huge part of its business is providing databases for the legal, medical, accounting and scientific communities. This is the sort of thing that cannot be cannibalised by the likes of Google and Facebook. Databases such as LexisNexis (a major legal and news database), Butterworths and Tolleys. It's also heavily into anti-money laundering and risk management software.

According to Wikipedia is also has the biggest exhibitions business in the world.

https://en.wikipedia.org/wiki/RELX_Group#Operations

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Re: RELX any opinions?

#201276

Postby simoan » February 14th, 2019, 11:02 am

SalvorHardin wrote:I own quite a few Relx shares indirectly as it is the second biggest shareholding in the Finsbury Growth and Income Investment Trust (my largest investment trust holding by quite some way), which is managed by Nick Train of Lindsell Train. I've long held the view that if Nick Train holds a company's shares then it's probably worth investigating a bit further.

Yes, I have a few as part of holding Finsbury & Growth IT too. It has some very good quality metrics so you can see why Nick Train may like it, but at the same time Terry Smith has never owned it as part of Fundsmith (in which I have a very large holding). Simple rule, but I never invest in anything with that much debt AND negative NTAV.

All the best, Si

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Re: RELX any opinions?

#201297

Postby UncleEbenezer » February 14th, 2019, 11:45 am

I took a look back in 2008, and invested in sector-peer Pearson instead.

For several years, this decision looked good, as PSON grew while Reed languished. Until about 2015, when PSON crashed, and Reed started to look the better story in retrospect.

Moral of the story? Don't rely on the Now. Or even the short term, like five (or in this case seven) years.

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Re: RELX any opinions?

#201330

Postby TheMotorcycleBoy » February 14th, 2019, 12:50 pm

Thanks Salvor,

SalvorHardin wrote:I own quite a few Relx shares indirectly as it is the second biggest shareholding in the Finsbury Growth and Income Investment Trust (my largest investment trust holding by quite some way), which is managed by Nick Train of Lindsell Train. I've long held the view that if Nick Train holds a company's shares then it's probably worth investigating a bit further.

Yes they definitely have a following in some investment circles.

SalvorHardin wrote:Relx isn't just an online newsagent; a huge part of its business is providing databases for the legal, medical, accounting and scientific communities. This is the sort of thing that cannot be cannibalised by the likes of Google and Facebook. Databases such as LexisNexis (a major legal and news database), Butterworths and Tolleys. It's also heavily into anti-money laundering and risk management software.

Yes, far more than just an e-newspaper. This is a screen grab from some the wordy part of the 2017 AR:

Elsevier serves the needs of scientific, technical and medical
markets by organising the review, editing and disseminating of
primary research, reference and professional education content,
as well as by providing a range of database and decision tools.
Elsevier’s customers are scientists, academic institutions,
research leaders and administrators, medical researchers,
doctors, nurses, allied health professionals and students, as well
as hospitals, research institutions, health insurers, managed
healthcare organisations, research-intensive corporations and
governments. All these customers rely on Elsevier to provide
high-quality content and critical information for making scientific
and medical decisions and create innovative tools to help focus
research strategies, increase research effectiveness, improve
medical outcomes, and enhance the efficiency of healthcare and
healthcare education.
In the primary research market during 2017, 1.6m research
papers were submitted to Elsevier. More than 20,000 editors
managed the peer review and selection of these papers, resulting
in the publication of over 430,000 articles in about 2,500 journals,
many of which are the foremost publications in their field and a
primary point of reference for new research. This content was
accessed by about 14m unique visitors on average per month, with
over 900m full-text article downloads last year. In 2017, Elsevier
launched 26 new subscription and open access journals, including
Materials Today Physics, Joule from Cell Press and The Lancet
Planetary Health.


and

For academic and corporate researchers, significant products
include Scopus, Reaxys and Knovel. Scopus, the leading abstract
and citation database of peer-reviewed literature with over 70m
publications from more than 22,500 active journals and 5,000
international publishers, allows researchers to track, analyse
and visualise the world’s research output. Reaxys enables the
shortest path to chemistry research answers, supporting the
early stages of drug development in the pharmaceutical industry,
exploratory chemistry research in academia, and product
development in industries such as chemicals and oil & gas.
Knovel is a decision support tool for engineers that helps them
to select the right materials, a mission-critical use case in
product development across chemicals, oil & gas and other
engineering-focused industries.
Elsevier serves academic and government research administrators
through its Research Intelligence suite of products. Leveraging
bibliometric data from Scopus and other data types such as patent
citations and usage data, SciVal is a decision tool that helps
institutions to establish, execute and evaluate research strategies.
Pure is an enterprise research management solution that
aggregates an organisation’s research information from
numerous internal and external sources into a single platform
and ensures the data that drives strategic decisions is trusted,
comprehensive and accessible in one place. Our Analytical
Services team provides accurate, unbiased analysis on research
performance by combining high-quality data sources with
technical and research metrics expertise. Expert LookUp is an
online tool that helps funding bodies find the best peer reviewers
for evaluating grant applications.


and

Elsevier’s flagship clinical reference platform, ClinicalKey,
provides physicians, nurses, and pharmacists with access to
leading Elsevier and third-party reference and evidence-based
medical content in a single, fully integrated site. ClinicalKey
is growing well, and is currently accessed by more than
4,400 institutions.

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Re: RELX any opinions?

#201337

Postby TheMotorcycleBoy » February 14th, 2019, 1:01 pm

And a flight perusal of the AR reveals show cases studies of some of their clintele:

Carnegie Mellon University uses "scival" an egghead product for multi discipline research

SciVal offers quick, easy access to the
research performance of over 9,000
research institutions. This easy-to-use
research and analysis solution has
unparalleled power and flexibility. It
enables customers to visualise research
performance, benchmark relative to
peers, develop collaborative partnerships
and analyse research trends. Using
advanced data analytics super-computer
technology, SciVal allows users to instantly
process an enormous amount of
information to generate powerful data
visualisations in seconds. SciVal is
powered by the Scopus database which
covers records from over 22,500 active
journals of 5,000 publishers worldwide and
is the data source of choice for world class
ranking and assessment exercises...


Legal and General uses "LexisNexis"

Using RELX Group’s HPCC Systems
super-computing power, LexisNexis
Risk Classifier assesses a proposed
insured’s risk profile and distills
it into a numeric score. Improving
the underwriting and consumer
experience, the Risk Classifier score
is delivered in real time without the
need for an invasive medical
examination or blood and urine tests.

(so now you know who to blame for your insurance renewal increase)

Rolls Royce uses "Flight Global"

FlightGlobal’s Tracked Utilisation solution generates data
per aircraft equipped with Rolls-Royce engines within
three days of each tracked flight, meaning the company
can now rely on an independent record of its customers’
experience that identifies any gaps in ACARS. Tracked
Utilisation also allows the company to release
highly-skilled staff to focus on their core jobs – solving
problems and creating value for customers. Rolls-Royce
is the first in the industry to deploy Tracked Utilisation
and, following a successful trial period, has been rolling
out the product during 2017.


simoan wrote:net debt nearly 4x net profit

Yes definitely a big wodge of debt. Presumably in financing gazillions of acquistions, and hopefully not divis and buybacks (well any more than all the rest are!)

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Re: RELX any opinions?

#201341

Postby TheMotorcycleBoy » February 14th, 2019, 1:04 pm

So whilst REL looks like a highly profitable "moat" (as YeeWo points out), the business is hard to analyse/understand (to state a Buffet criteria).

And regards the debt and intangibles, I guess the question is, is the sum worth more than the parts?

Matt

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Re: RELX any opinions?

#202168

Postby TheMotorcycleBoy » February 18th, 2019, 6:16 pm

SalvorHardin wrote:Relx is a company I've never really looked at in depth, not even when it was called "Reed Elsevier".

I own quite a few Relx shares indirectly as it is the second biggest shareholding in the Finsbury Growth and Income Investment Trust (my largest investment trust holding by quite some way), which is managed by Nick Train of Lindsell Train. I've long held the view that if Nick Train holds a company's shares then it's probably worth investigating a bit further.

Relx isn't just an online newsagent; a huge part of its business is providing databases for the legal, medical, accounting and scientific communities. This is the sort of thing that cannot be cannibalised by the likes of Google and Facebook. Databases such as LexisNexis (a major legal and news database), Butterworths and Tolleys. It's also heavily into anti-money laundering and risk management software.

According to Wikipedia is also has the biggest exhibitions business in the world.

https://en.wikipedia.org/wiki/RELX_Group#Operations

Just discovered that this firm has also been a holding in the UK Buffetology fund:
http://www.castlefield.com/media/2310/f ... 2017v2.pdf

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Re: RELX any opinions?

#202216

Postby TheMotorcycleBoy » February 19th, 2019, 6:10 am

UncleEbenezer wrote:I took a look back in 2008, and invested in sector-peer Pearson instead.

For several years, this decision looked good, as PSON grew while Reed languished. Until about 2015, when PSON crashed, and Reed started to look the better story in retrospect.

Moral of the story? Don't rely on the Now. Or even the short term, like five (or in this case seven) years.

I see. I did have a quick look at PSON just now:

https://www.marketscreener.com/PEARSON- ... inancials/

they do look a little lame, and those numbers and graphs don't suggest a recovery any time soon. Bizarrely they still command a highish P/E, somewhere between 18.5 - 25 depending where I look. Weird.

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Re: RELX any opinions?

#203877

Postby TheMotorcycleBoy » February 26th, 2019, 9:26 am

I ended up *actually* using some info I think RELX provided in my day job:

https://www.sciencedirect.com/topics/en ... y-register

I didn't pay for it however....

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Re: RELX any opinions?

#245055

Postby TheMotorcycleBoy » August 17th, 2019, 4:15 pm

I'm having another look at RELX.

So fair enough, they carry some debt, (unless so do lots of firms). Interest Rates are low, and if they can cover this well then....

Anyway they do have massive reach into lots of segments. Whatever risk they have to their EBIT, must be very well diversified.

So, I'm busy poring through AR2017 (I've got AR2018 to look forward to later :lol: )

This is how their market segments are split up:

Market segments (EBIT):
Science/tech+medical 40%
Risk+Business 33%
Legal 15%
Exhibitions 12%

I'm wondering, how does their exhibitions business work? I assume they don't actually own the places where they host the exhibitions...do they just own the brand names of exhibition show e.g. "interphex", "india-big-7-event" etc., and hire the actual venue locations as and when?

e.g.
https://www.relx.com/our-business/our-s ... repreneurs
https://mitmagazine.co.uk/news/reed-exh ... ig7-event/

Many thanks
Matt

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Re: RELX any opinions?

#245166

Postby torata » August 18th, 2019, 8:55 am

TheMotorcycleBoy wrote:I'm wondering, how does their exhibitions business work? I assume they don't actually own the places where they host the exhibitions...do they just own the brand names of exhibition show e.g. "interphex", "india-big-7-event" etc., and hire the actual venue locations as and when?

e.g.
https://www.relx.com/our-business/our-s ... repreneurs
https://mitmagazine.co.uk/news/reed-exh ... ig7-event/


Basically yes that's right. The exhibitions side will do the organizing / logistics for the event once they been commissioned to do it - which could be from within Relx themselves or could be an external organization, e.g. Association of XYZ. They'll then negotiate with the venues.
torata

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Re: RELX any opinions?

#245169

Postby TheMotorcycleBoy » August 18th, 2019, 9:07 am

torata wrote:
TheMotorcycleBoy wrote:I'm wondering, how does their exhibitions business work? I assume they don't actually own the places where they host the exhibitions...do they just own the brand names of exhibition show e.g. "interphex", "india-big-7-event" etc., and hire the actual venue locations as and when?

e.g.
https://www.relx.com/our-business/our-s ... repreneurs
https://mitmagazine.co.uk/news/reed-exh ... ig7-event/


Basically yes that's right. The exhibitions side will do the organizing / logistics for the event once they been commissioned to do it - which could be from within Relx themselves or could be an external organization, e.g. Association of XYZ. They'll then negotiate with the venues.
torata

Thanks, yes I've been reading Annual reports for 2017,2018. I didn't realise how large the exhibitions segment was. 13% of EBIT in 2018.

Do you currently own any RELX shares? Do think that the U of Cs cancellation of using the subscription model, could be the tip of the iceberg, and have a bigger effect on RELX's revenue going forward?

I have spent some time looking at some of their competitors in this area (e.g. Thomson Reuters and Wolters Kluwer) and noted that the subscription model is used by those firms. So whilst U of C may be able to cut costs by dropping out of the subscription contract, however I assume the flipside is that their researchers will no longer have such an easy mechanism to obtain the publications of others.

Wondered if you have any thoughts in this area.

Many thanks, Matt

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Re: RELX any opinions?

#245171

Postby TheMotorcycleBoy » August 18th, 2019, 9:28 am

Regards risk to the subscription model for revenue collection from the STM market segment, RELX have acknowledged this in both 2017 and 2018 ARs. (Annoyingly using identical paragraphs, in both reports. That's either copy and paste laziness, or perhaps indicates that they think the risk is minor and has not changed much).

From page 61 of AR2018:

Our Scientific, Technical & Medical (“STM”) primary research content, like that of most of our competitors, is sold largely on a paid subscription basis. There is continued debate in government, academic and library communities, which are the principal customers for our STM content, regarding to what extent such content should be funded instead through fees charged to authors or authors’ funders and/or made freely available in some form after a period following publication. Some of these methods, if widely adopted, could adversely affect our revenue from paid subscriptions.

We engage extensively with stakeholders in the STM community to better understand their needs and deliver value to them. We are open to serving the STM community under any payment model that can sustainably provide researchers with the critical information tools that they need. In particular, the number of articles we publish on an author pays, open access basis is growing rapidly. We focus on the integrity and quality of research through the editorial and peer review process; we invest in efficient editorial and distribution platforms and in innovation in platforms and tools to make content and data more accessible and actionable; and we develop our research systems to provide capabilities to manage different payment models. We ensure
vigilance on plagiarism and the long-term preservation of research findings.


Matt


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