Today I took a decent position in Euromoney, which I hope will be a long term holding. I like them because their existing portfolio of high quality, niche businesses operates with a negative working capital model that generates prodigous amounts of free cash. They use that free cash for numerous bolt on acquisitions, adding similar specialist businesses to the portfolio. They also have long term economic tailwinds behind them, as they have the opportunity to grow in emerging markets over the coming decade. I love stocks that have the ability to compound earnings over the long term, and one excellent way of doing so is through bolt on acquisitions. This works when you have a steady supply of candidates, and when you have the ability not to overpay.
Euromoney should be debt free by the end of the year (if it doesn't make further acquisitions). It has a FCF yield of around 9% (net income obscures this due to sizeable intangible amortisation). With the ability to grow organically and use free cash well, I'm comfortable owning this for a long time.
