With OTEX trading at 5X forward earnings, we think a lot of bad news and risks are getting priced in here. It might not be our favourite name and we would prefer more growth but we think the odds are tilted in an investors favour at these levels.
We think TRI might be a bit less exposed to AI risks than OTEX as owning good and reliable data is something that we think will be valued when the dust settles and this seems to be confirmed by some deals TRI has been signing more recently. With high single-digit revenue growth and trading at 20X forward earnings, we think it looks good here as well. When sentiment turns on this 'theme' is anyones guess but in both scenarios we would view a lot of risks, whether real or not, to be getting priced in here. We would be fine holding both.