1 exceptional stock to consider buying in this latest market sell-off

Whenever the market is declining, it can be a good idea to buy stocks that represent quality companies.

For example, experiential (LSE: EXPN) is performing well on quality indicators. And it has a multi-year track record of generally growing sales, earnings, and cash flow.

A Nick Train favorite

The FTSE100 The company acts as a global information service provider. And it’s one of the favorites of well-known successful fund manager Nick Train.

For example, the stock is one of the top 10 holdings in Finsbury Growth and Income Trustthat he manages. And he also has a large personal stake in the foundation.

Train aims to buy and hold shares for the long term. And one of its key requirements is that a business has the potential to generate a growing revenue stream year after year.

Meanwhile, Experian’s normalized earnings show a compound annual growth rate (CAGR) of just under 9%. And shareholder dividends are just under 6%.

The balance sheet is strong, and its record operating cash flow shows a CAGR of just over 6%.

There is a lot to like about the company, its trading history and financial record. And City analysts are forecasting high-single-digit percentage increases in earnings and dividends for the year through March 2024.

And those estimates are supported by a robust forecast statement that was provided in January’s third-quarter trading update.

Chief Executive Officer Brian Cassin said at the time the business had performed well in the three months ended December 31, 2022. And the results were in line with directors’ expectations.

Continuous steady growth of the company

Cassin cited new products, new business deals and consumer expansion as reasons for the success.

The pressure in the global economy is likely to continue for some time. But Cassin believes the business will remain resilient. And that’s because of the company’s growth strategy and its increasing countercyclical revenue streams.

We will learn more about the recent trading on the full year earnings report due May 16th.

In the meantime, it looks like the stock has been dragged lower in the recent bout of overall stock market weakness. With a share price of 2,641 pence, it is around 12% lower than a month ago. And to put that development in perspective, it’s down a little over 10% over the past year.

But there’s no obvious evidence of any immediate problems in the underlying business. So the current price weakness could be an opportunity to buy the stock cheaper.

However, the rating already looks pretty full. And that situation may pose some risks for shareholders. After all, even quality companies with strong finances and a decent trade balance can run into operational problems from time to time. And if the company goes ex-growth going forward, the valuation could come down.

Right now, the forward-looking earnings multiple for the trading year ended March 2024 sits just below a lofty 22. Still, investors should now dig deeper into the research to make the stock a long-term holding in a diversified portfolio.