Isentia Group Limited (ISD)

ISD is the largest media intelligence agency in the Asia-Pacific region. The company provides its customers with real-time media information, analysis and advice, from filtering over 250 million online news articles and 2.6 million print articles monthly, and 8 million social media posts and 1,750 television and radio programs daily.

Its customers use this media intelligence to enable better decision making, create effective marketing campaigns, and protect their brand and reputation. The business ticks a lot of boxes for us given that they have a competitive advantage through their 90% market share in Australia and New Zealand, a high level of recurring income, a high client retention rate, strong returns on invested capital and a strong balance sheet.

Looking forward, their growing presence in Asia will likely augment earnings, as this market remains in its infancy compared to other markets around the world. The threat of competition is ever present given the possibility that a global player like Dow Jones Insight might look to increase its market share in our region.

While this risk should not be underappreciated, we believe the company’s dominant market position places them in a strong position to ward off competitive threats. According to our forecasts for 2017, the company is trading on 20 times earnings and paying a dividend yield of 2.5% partly franked.

We believe these numbers are undemanding for a company with a dominant market share in Australia, and strong growth prospects in Asia, where the market remains in its infancy.

Contact us to discuss if this company is right for you.