Author argues software-only SaaS is uninvestable but data-moat SaaS names (LSEG, RELX, Wolters Kluwer, Experian, TRI) have been oversold alongside the selloff and present an opportunity because their proprietary data cannot be legally replicated by LLMs.
LSEG.L — LONG The author argues that SaaS companies built on data moats, such as LSEG, have been dragged down with the broader software selloff and look oversold. The mechanism is that the core proprietary data moat is hard for LLMs to replicate legally, so the market is over-penalizing these names. The author acknowledges margins may be suppressed as LLMs offer alternatives for value-add products, which is the main stated risk. Horizon is unspecified.
Hence a company like LSEG looks oversold.
RELX — LONG The author lists RELX among data-moat SaaS names dragged down with the software selloff that present an opportunity. The mechanism is that the core data moat is hard for LLMs to replicate legally, making the selloff overdone. The stated risk is that margins may be suppressed as LLMs offer alternatives for the value-add products these companies sell. Horizon is unspecified.
As does RELX, Wolters Kluwer, Experian, TRI etc.
WKL.AS — LONG The author includes Wolters Kluwer among data-moat SaaS names dragged down with the software selloff that present an opportunity. The mechanism is that the core data moat is hard for LLMs to replicate legally, making the selloff overdone. The stated risk is that margins may be suppressed as LLMs offer alternatives for the value-add products these companies sell. Horizon is unspecified.
As does RELX, Wolters Kluwer, Experian, TRI etc.
EXPN.L — LONG The author names Experian as an example of a data-moat SaaS business dragged down with the software selloff that presents an opportunity. The mechanism is that the core data moat is hard for LLMs to replicate legally, making the selloff overdone. The stated risk is that margins may be suppressed as LLMs offer alternatives for the value-add products these companies sell. Horizon is unspecified.
As does RELX, Wolters Kluwer, Experian, TRI etc.
TRI — LONG The author lists Thomson Reuters (TRI) among data-moat SaaS names dragged down with the software selloff that present an opportunity. The mechanism is that the core data moat is hard for LLMs to replicate legally, making the selloff overdone. The stated risk is that margins may be suppressed as LLMs offer alternatives for the value-add products these companies sell. Horizon is unspecified.
As does RELX, Wolters Kluwer, Experian, TRI etc.