There is “tremendous value” in Thomson Reuters, this investor says

Raymond James Investment Counsel portfolio manager Chris Blumas says Thomson Reuters (Thomson Reuters Stock Quote, Chart, News, Analysts, Financials TSX:TRI) looks attractive after a sharp pullback, arguing the company still has a strong data moat and multiple ways to create shareholder value.

Speaking on BNN Bloomberg’s Market Call on June 18, Blumas said the recent pressure on the stock is difficult to explain, particularly because large language models could become new growth drivers for data-rich companies.

“If you look at the steps that Thomson Reuters has taken, they’ve been exceptional,” Blumas said.

He said the company has a strong business model and should benefit from AI, though he acknowledged that the risk of disruption is not zero.

“I think there’s a high likelihood that they have a fairly solid moat and that they’ll benefit from AI,” he said.

The fund manager said the market has punished the stock, possibly because it had previously traded at a lofty valuation. But he said the current setup is much more attractive.

“This is a business that’s trading right around 18 times earnings,” he said. “It’s got a free cash flow yield of around 6% and a super strong balance sheet.”

Blumas said Thomson Reuters has “a lot of levers” it can use to create value for shareholders over the longer term.

“I think there’s tremendous value in this name right now.”

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