Q: We definitely bought TRI at the recent high and ever since TRI seems to be falling .5-1% per day. My husband wants to sell and cut our losses. I think TRI must be close to its bottom. Has there been a fundamental change, or has the sentiment change just been over last quarter’s miss? Your thoughts would be appreciated.
5i Research Answer:
In recent years, TRI has gradually transformed itself into a software company serving professionals across many industries. Sentiment has been quite poor toward software companies recently due to fears that AI could replace these offerings in the future. We don’t think that premise is fully justified. While AI may replace some software solutions, the vast majority of sticky software companies will integrate AI as a new feature rather than be replaced.
We think TRI is high quality and unlikely to go anywhere anytime soon. Given the drawdown, we believe TRI’s share price is closer to the bottom than the top. It has a very impressive long term history of growth and capital allocation. But investors need patience with this name.