FactSet (FDS) is another subscription-based company that we believe still has a long trajectory of growth ahead. FactSet provides financial data and analysis to the investment community. The company aggregates data from multiple sources into proprietary data sets, and overlays unique analytical capabilities, which we believe give it a competitive advantage. This open approach to content, coupled with a commitment to a high level of customer support, has resulted in an exceptionally sticky business model, with retention rates of more than 95%. The stock has tripled since we first purchased it. Like most information services companies, FactSet generates outstanding cash flow. As the company prefers to rely on organic product development rather than acquisitions to improve its portfolio, it has also been able to return excess cash to shareholders.
From Baron Asset Fund first quarter 2017 shareholder letter.
