The Misfits: Gartner (IT)
The ubiquitous research & advisory firm doesn't completely fit the mold of a Misfit stock, but that may not be an issue.
I set out with two goals for this newsletter:
Give underappreciated companies the shine they deserve.
Identify the traits these companies have in common to better pick the next generation of great companies.
This journey has led to some not-quite-definitive-but-pretty-close-to-definitive characteristics to look for: Enduring business models, well-aligned management teams, and good-but-not-great returns that don’t engender lots of competition.
Occasionally, some companies work incredibly well, but don’t necessarily fit this profile. Case in point, Gartner (NYSE: IT). The research and consultancy firm has been a market-beating stock, regardless of the time horizon you choose.
Although Gartner has been an incredible performer, it does not display many of the traits I would typically look for in a company. Its performance has been so good that it makes me reconsider whether these criteria are good at sniffing out great investments or if they, too, are overlooking other great investments.
Let’s dig into why Gartner does so well even though it doesn’t seemingly fit the typical Misfit stock profile.
Shoutout to Koyfin for their data and charts. Koyfin has become an integral part of how I screen for, track, and analyze companies. Thanks to having a decade of data at my fingertips instead of manually going through stacks of quarterly and annual filings, the analysis process has become more thorough and much faster.
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