1 FTSE 100 share I’d buy like there’s no tomorrow

Britain’s blue-chip index continued to advance to record highs. A 4% rally since the beginning of 2023 has Footsie flirting with a record high of 7,903 points, set back in May 2018. Despite this, one FTSE 100 show in particular still looks good value for me over the long term.

Big data and analytics

At London Stock Exchange Group (LSE: LSEG) owns and operates the London Stock Exchange. It also owns a number of stock market-related assets, including Refinitiv, Tradeweb, and FTSE Russell. The current corporate structure of the Group was further strengthened in 2007 when it merged with Borsa Italiana (Milan Stock Exchange).

But eyebrows were raised when the company announced it was acquiring data and trading company Refinitiv in 2019. It paid $27bn, its biggest acquisition to date.

Group CEO David Schwimmer has noted that he advises on hundreds of transactions in his previous role Goldman Sachs. But he struggled to think of one”as transformational and value creating” is the company’s acquisition of Refinitiv.

Currently the second largest provider of market data after Bloomberg, Refinitiv has a customer base of 40,000 financial institutions in 190 countries. The combination of London Stock Exchange Group and Refinitiv creates a truly world-class operation in terms of scale and comprehensive data offerings.

While I think the acquisition is smart, that doesn’t mean the big price tag doesn’t create a risk. One is that the company’s net debt is now around £5.7bn, which represents a tenfold increase in just five years.

Microsoft partnership

Last year, the tech giant Microsoft announced that it was taking a 4% stake worth $2bn in the company. For its part, the Group has committed to spending a minimum of $2.8bn with Microsoft on cloud-related services. This will involve upgrading the company’s infrastructure, including the Refinitiv platform.

Many analysts now expect that Refinitiv’s planned platform transformation could challenge Bloomberg’s market dominance.

As for the stock, it is now cheaper than in recent years. It currently has a forward price-to-earnings (P/E) ratio of 21. In 2021, the P/E will be at 38.

This stock price has fallen 18% over the past two years. One share is now worth more than £74, compared to £98, reached back in February 2021.

IPO pipeline

There was a sharp decline in initial public offerings (IPOs) in the UK last year, due to economic uncertainty caused by the war in Ukraine. But Schwimmer says there are “healthy pipe“The company is waiting for the market to settle before going public in London.

Simply put, more IPOs represent more opportunities for companies to make money.

There are a number of interesting UK companies in this potential IPO pipeline. These include craft beer chain Brewdog, and Revolut, a fintech start-up hoping to get a UK banking licence. Also, semiconductor giant ARM Holdings is rumored to be re-listed on the London Stock Exchange.

I look forward to kicking the tires on that potential investment when the opportunity arises. In the meantime, I also have a healthy channel of stocks that I want to invest in. So I have put LSEG stock on the watch list until I have more capital to deploy. But I expect to have stock sooner rather than later.