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Moody's (MCO) Buys Stake in MioTech to Provide KYC Solutions

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As part of its efforts to offer innovative environmental, social, and governance (“ESG”) and know your customer (“KYC”) solutions to the financial markets of China, Moody's Corporation (MCO - Free Report) has acquired a minority stake in MioTech. MioTech is a provider of alternative data and insights that serves the China ESG and KYC markets.

Moody’s used cash to fund the investment, which is not expected to have any material impact on its 2020 results.

Min Ye, the managing director and head of International for Moody’s, stated, “MioTech’s leading technology platform collates and analyzes an impressive range of company, industry, ESG, and KYC data from a variety of public sources to provide relevant information to customers. Our partnership will provide valuable data, analytics, and insights to China’s domestic risk and investment markets.”

Using artificial intelligence (“AI”), MioTech tracks and scans alternative data sources related to ESG and KYC factors, supply chains, and financial information for various public and private companies in China. Its analytical tools help in turning unstructured datasets into insights for portfolio managers, research analysts, and risk managers. Moreover, its AI algorithms help in detecting entities’ vulnerabilities by monitoring news, social media, disclosure, and other forms of alternative data in real time.

MioTech’s CEO and co-founder, Jason Tu said, “MioTech looks forward to an exciting partnership with Moody’s. Moody’s deep industry know-how will further strengthen MioTech’s data and technology across different sectors and geographies.”

Notably, MioTech is expected to continue to operate as an independent entity.

Our Take

Moody’s continues to grow inorganically. Its acquisitions over the past years have provided it with increased scale and cross-selling opportunities across products and vertical markets.

Last month, it purchased Acquire Media, an aggregator and distributor of curated real-time news, multimedia, data, and alerts, from Naviga, Inc. The deal, which complements Moody’s earlier acquisitions of Bureau van Dijk and Regulatory DataCorp, advances the Moody’s Analytics (“MA”) segment’s position as a leader in KYC solutions.

Notably, these inorganic growth efforts are expected to aid revenue diversification and also be accretive to earnings. In fact, Moody’s is expected to continue to pursue opportunistic deals that are a strategic fit and complement its existing operations.

Over the past year, shares of the company have gained 32.3% against a decline of 12.6% recorded by the industry.


 

Currently, Moody’s carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

A few other top-ranked stocks from the finance space are mentioned below.

Waddell & Reed Financial (WDR - Free Report) currently sports a Zacks Rank #1. The Zacks Consensus Estimate for its 2020 earnings has been revised upward by 15.2% in the past 30 days. Also, its share price has increased 21.7% in the past six months.

Invesco (IVZ - Free Report) also flaunts a Zacks Rank of 1. Its earnings estimates for the current year have been revised 9.6% upward over the past 30 days. Further, the company’s shares have jumped 80.4% in the past six months.

The Blackstone Group’s (BX - Free Report) earnings estimates for 2020 have been revised upward by 20.9% over the past 30 days. Its shares have gained 7.4% over the past six months. At present, the company carries a Zacks Rank #2.

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