The past 4 or 5 years have been remarkable for the financial services industry as far as how they interact with customers. Just over a decade ago, getting a stock quote often involved calling a broker on the phone or waiting for the newspaper and then wading through the pages of quotes in the business section. Doing company research was even more difficult. Just getting a hold of the SEC filings to look at income statements and balance sheets was a tedious process, requiring a call to the broker, a wait for the materials to arrive in the mail, and then wading through literally hundreds of pages in dozens of documents. Sure, you could always use a research service, but the information still took days to arrive to you and could not be quickly searched, compiled, or compared between companies.
My, how things have changed. Today you can access SEC filings, research service reports, get up to the second stock quotes, compare dozens of stocks against each other, screen literally thousands of stocks by certain criteria, and so forth within minutes using online tools and services. The Internet has made stock investing infinitely easier than it was not that long ago, and there is no shortage of clients taking advantage of it. Financial services firms across the board, from independent sites like the Motley Fool and Morningstar (NASDAQ: ), to online brokers like E*TRADE (NasdaqGS: ) and Zecco, to large deposit and investment banks now allow clients to access financial data, information, and tools. But it would be expensive and inefficient for each of these firms to compile the data themselves. That's where today's Top Buy pick, Interactive Data Corporation (NYSE: ), comes into play.
IDC provides the software that allows the end user sites to display and use financial data, without the burden of compiling it. The company is organized into four business units. Interactive Data Processing and Reference (63% of sales) is the bread-and-butter business of supplying quotes, dividend information, credit ratings, and basic background data on thousands of listed equities. Interactive Real-Time Data (20%) supplies up-to-the-second pricing information for real-time applications.
