Title: Best Buys March 2026 — Top 5 stocks right now
Show: Compounding Quality (compoundingquality.net — Pieter Slegers' quality-investing newsletter)
Guest: Pieter Slegers (author)
Date: 2026-MAR-01
URL: https://www.compoundingquality.net/p/best-buys-march-2026
Length: written post (paid) — no timestamps
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By monthly tradition, you'll get an update on our Best Buys of the month.

What's going on in the markets? And what are our favorite stocks?

Let's get a little bit wiser today.

February 2026

The S&P 500 declined by -1.4% in February.

Investors are Fearful today according to the Fear & Greed Index.

Best & Worst Performers

This overview shows you the best and worst performers in our investable universe.

Worst performers

The cheaper we can buy great companies, the better.

Here are the worst performers of the past month:

A company like KKR starts to become more and more interesting if you ask me.

Best performers

These stocks did well over the past month.

Spotlight: Fair Isaac Corporation ($FICO)

How does the company make money?

FICO licenses its proprietary scoring algorithm to major credit bureaus (Equifax, Experian, and TransUnion).

The company provides software to banks that helps them make and automate decisions.

Why does it deserve to be in the spotlight?

FICO is a data and analytics company.

They are a tollbridge on the American credit system.

If you've ever checked your credit score, you've interacted with FICO.

Fair Isaac licenses its proprietary FICO Score to lenders.

Every time someone applies for a mortgage, credit card, or auto loan… FICO is being paid a small fee.

Most of Fair Isaac's revenue comes from its credit score business.

The other piece of FICO's business is the decision management software it provides to banks.

This is deeply integrated and critical to their day to day operations.

It helps automate high-volume decisions, like fraud detection and account transitions, giving it very high switching costs.

Fear of AI Disruption

The stock has recently declined from its highs of over $2,200 to around $1,400.

Why?

Investors are panicking… They believe Generative AI is about to wipe out traditional credit scoring for good.

In the most pessimistic scenario of the market, lenders will grab AI tools and 'vibe-code' their own credit scores from scratch.

That's a ridiculous thing if you think about it for a second.

FICO's Moat

The fear for Artificial Intelligence is short-term noise if you ask me.

FICO's moat isn't just it's credit score algorithm.

It's the network effect and regulatory integration.

90% of top U.S. lenders use FICO.

The system is hard-coded into the global financial infrastructure.

ROIC remains exceptionally high (often above 50%).

The recent -30% drop in the share price does make it look interesting.

But it's coming down from very expensive levels, trading at a P/E of >100x in 2024.

Based on the expected EPS of 2028, FICO now trades at a Forward PE of 21.6x.

This is still not very cheap.

Because of this, I think there are more attractively priced Quality businesses elsewhere.

Best Buys March 2026

Only the best of the best is good enough for us.

We focus on companies with:

A wide moat. High ROIC. Consistent Free Cash Flow.

Let's dive into our five favorite buys for the month.

5. Pool Corporation ($POOL)

How does Pool Corporation make money?

Pool Corporation makes money by distributing swimming pool supplies, equipment, and outdoor living products. It is the largest wholesale distributor of pool-related products in the world.

Is it an interesting company?

Pool Corp enjoys a lot of Economies of Scale.

They serve 125,000 customers.

The larger they get, the cheaper they can buy and distribute their products.

AI isn't the problem for Pool Corporation right now.

Making too much money during the COVID-19 pandemic is.

Stuck at home with government money in their bank accounts, people across the country made one decision: build a pool.

Demand surged and peaked in 2022. Since then, Pool Corporation struggled to keep growing.

The good news for Pool Corp?

All the new pools installed during the demand spike will need chemicals and maintenance products for the next few decades.

Pool Corporation benefits a lot from these recurring sales.

Short term investors are seeing the earnings decline as permanent.

That's why Pool is trading at an attractive valuation today.

Buying a business with recurring sales and a strong moat like Pool during a cyclical bottom is often a great investment for a long-term investor.

4. Adyen ($ADYEN)

How does Adyen make money?

Adyen is a global payment technology platform that enables merchants to accept and process payments across channels and geographies through a single integrated system. The company makes money by charging transaction fees on processed payment volume.

Is it an interesting company?

Adyen is a single-platform global payments processor for clients like Uber, Netflix, Starbucks.

The company has a clear competitive advantage.

Most competitors use a patchwork of old systems.

Adyen built theirs from scratch.

This leads to Technical Excellence and higher authorization rates for merchants.

Every single year, more and more payments go through Adyen.

Adyen is a true compounding machine.

They're able to reinvest at attractive rates, maintain high margins, and generate a lot of cash.

ROIC: 10.0%. Net Margin: 44.7%. FCF/Net Income: 173.7%.

In the past, they've grown by over 30% per year.

But the stock fell nearly 40% at one point because H2 2025 volume growth was 'only' 12%.

Investors who were used to 30% growth panicked and sold.

But guess what? There's a very good reason for the slowdown.

Adyen is choosing Quality over Volume.

They are walking away from low-margin transactions to focus on more profitable enterprise partnerships.

They are also expanding into Embedded Finance (issuing cards) which grew 8x last year.

This kind of long-term thinking and investment in the business shouldn't be a surprise.

What makes it even better? Adyen is still run by it's co-founder, Pieter Willem van der Does. He owns 3% of the company.

Now let's dive into the top 3.

3. S&P Global ($SPGI)

How does the company make money?

S&P Global provides financial market intelligence, credit ratings, and benchmarks that help investors and institutions evaluate risk and make decisions. The company earns revenue mainly through subscriptions to its data products, along with fees from its ratings and index businesses.

Is it an interesting company?

S&P Global is an incredibly important financial company:

They own the S&P 500 Index. They are the world's leading Credit Ratings Agency.

You cannot issue corporate debt without a rating from S&P or Moody's.

It is a legal duopoly.

Just like Fair Isaac, it's an amazing toll bridge business.

S&P Global gets paid every time: a company issues a bond; someone buys an S&P 500 ETF.

I think these are both very durable businesses:

Credit Ratings: Regulations often require pension funds to only hold debt rated by S&P or Moody's.

Indexes: The S&P 500 is the standard benchmark, and it benefits from network effects. More assets lead to more liquidity, which drives even more investors into their indices. It is a self-reinforcing flywheel.

S&P Global is another Quality company that declined by more than 20% recently.

Why?

The market is afraid that AI will disrupt S&P Global's analytics and data business.

I don't think that's likely.

S&P Global owns proprietary market data going back over a century.

Their Platts commodity prices and CARFAX records are private data.

Nobody else has this information. And it would be extremely difficult to copy.

This is short-term noise if you ask me.

S&P Global is using its own AI (Kensho) to make its data more valuable, not less.

They own the data that LLMs need to be accurate.

I would expect S&P Global to continue growing its revenue at attractive rates into the future.

2. KKR & Co. Inc ($KKR)

How does KKR make money?

KKR is an American investment company. They use money from big clients (like pension funds) to buy and grow other companies.

Is it an interesting company?

KKR is a large alternative asset manager.

They invest money from institutions and wealthy individuals in private equity, infrastructure, and real estate.

They make money in two ways: Management Fees (stable income); Performance Fees (sharing the profit when they win).

Private equity is a very interesting industry.

In the long term, it outperforms public markets.

In private equity, size and reputation are everything.

KKR has both.

They just finished their biggest fundraising year ever, raising $129 billion in 2025 alone.

KKR has nearly $750 billion in Assets Under Management.

It includes $126 billion in cash, waiting to be deployed into attractive investments when they come along.

KKR is a great company, but it was also a very expensive stock.

It has recently come down by almost 50% for a few reasons:

KKR has about 7% of its portfolio in software, so KKR's price came down with software companies.

They also recently missed the analysts' prediction for Q4 EPS ($1.24 vs $1.26).

KKR remains a very strong business.

Every year, their Assets Under Management grow.

As 2025 was a record year for fundraising, I expect that trend to continue.

The more assets KKR manages, the more fees it can collect.

What makes it even more interesting?

Insiders are buying shares as we speak.

1. MSCI Inc. ($MSCI)

How does MSCI make money?

MSCI provides financial data and creates indexes for international markets. The company sells data subscriptions to investment firms and earns money when ETF providers use its indexes.

Is it an interesting company?

MSCI is the standard for investment indices.

Every time you buy an ETF with MSCI in its name, MSCI makes money.

Here are a few examples: iShares Core MSCI World; iShares MSCI ACWI ETF; Vanguard MSCI World ETF.

MSCI collects a small fee based on the Assets Under Management (AUM).

They are the leading provider of global indexes with over 1,400 ETFs linked to their data.

Just like Fair Isaac and S&P Global, MSCI is a classic toll-bridge business. These companies are usually very attractive investments.

MSCI clearly benefits from the massive, unstoppable trend of passive investing.

There is currently more than $2.3 trillion (!) linked to MSCI's indexes.

Big players like Vanguard and Blackrock also rely on MSCI's reliable data and analytics software.

Both the index and analytics businesses have high retention rates.

Having over 90% retention (and recurring revenue) is just amazing.

It's an amazing business with consistently high ROIC and cash generation.

But investors are worried that AI will hurt MSCI's analytics business.

Short-term stock price moves don't change the underlying economics.

MSCI consistently makes more money year after year.

Last but not least:

MSCI is a Cannibal Stock. They heavily buy back shares.

Just like for KKR, insiders are heavily buying shares today.

Conclusion

That's it for today.

Here are the five companies we covered:

Pool Corp ($POOL): The largest wholesaler of pool products in the world.

Adyen ($ADYEN): A single-platform payment processor.

S&P Global ($SPGI): The global benchmark for credit ratings and indices.

KKR ($KKR): A titan of private equity.

MSCI ($MSCI): The Gold Standard of indexing.

Everything in life compounds
Pieter (Compounding Quality)

Book: Order your copy of The Art of Quality Investing here

Used sources: Interactive Brokers (portfolio data and executing all transactions); Fiscal.ai (financial data)