Add a New Bulls Reason

Company: Accenture (ACN)
Current price:
Headline: (100 character max)
Analysis:
Cancel
100%
agree
23 votes

  Third Qrt. Earnings Beat Expections

June 26th Accenture reported Q3 EPS of $0.74 compared with consensus of $0.69. Revenues came in at $6.1 billion versus an average Reuters estimate of $5.9 billion. Fourth-quarter revenues were projected to be $5.9-6.1 billion compared with consensus expectations for $5.75 billion.

Likewise, guidance for full-year EPS was ahead of expectations and raised from $2.55-2.60 to $2.63-2.65.

Of note, the CEO stated that the company is not seeing any cancellations or big delays in its business as a result of the weaker U.S. economy and financial sector. CEO Bill Green commented, “In past downturns, that’s always been a threat. We have not had cancellations or overly long delays in this environment

(100 character max) Cancel
100%
agree
1 votes

  "Cheaper than competitors, $2 Billion a year in cash flow and no short term debt"

Accenture generates about $2 billion a year in free cash flow, currently holds $3.3 billion in cash and has almost no short-term debt. This is what makes Accenture so unique. From a cashflow perspective, ACN is a juggernaut and while at 15 times next year's eanings, it is more expensive than Electronic Data Systems (EDS), it is definitely cheaper than outsourcing and consulting outfits like Cognizant (CTSH), Infosys (INFY) and WiPro (WIT).

(100 character max) Cancel
0%
agree
0 votes

  Cheaper than competitors, $2 Billion a year in cash flow and no short term debt

Accenture generates about $2 billion a year in free cash flow, currently holds $3.3 billion in cash and has almost no short-term debt. This is what makes Accenture so unique. From a cashflow perspective, ACN is a juggernaut and while at 15 times next year's eanings, it is more expensive than Electronic Data Systems (EDS), it is definitely cheaper than outsourcing and consulting outfits like Cognizant (CTSH), Infosys (INFY) and WiPro (WIT).

(100 character max) Cancel
0%
agree
0 votes

  Stong international business means weak dollar helps Accenture

With a strong international exposure, the weak US dollar has not had a negative impact on Accenture's earnings. Additionally, impact from a weaker US economy will be offset by strong demand from emerging markets and Europe.

2007 has not seen the stock do much. Indeed it is up less than 10% and has significantly underperformed the market, specially the tech sector. However, at current levels, the stock sits at a strong level of support at its 200 day moving average and carries low risk. That is why I recommend buying ACN at or below $38.

Faisal Laljee Full Disclosure: I do not own ACN but my position can change anytime without notice.

(100 character max) Cancel
Wikinvest © 2006, 2007, 2008, 2009, 2010, 2011, 2012. Use of this site is subject to express Terms of Service, Privacy Policy, and Disclaimer. By continuing past this page, you agree to abide by these terms. Any information provided by Wikinvest, including but not limited to company data, competitors, business analysis, market share, sales revenues and other operating metrics, earnings call analysis, conference call transcripts, industry information, or price targets should not be construed as research, trading tips or recommendations, or investment advice and is provided with no warrants as to its accuracy. Stock market data, including US and International equity symbols, stock quotes, share prices, earnings ratios, and other fundamental data is provided by data partners. Stock market quotes delayed at least 15 minutes for NASDAQ, 20 mins for NYSE and AMEX. Market data by Xignite. See data providers for more details. Company names, products, services and branding cited herein may be trademarks or registered trademarks of their respective owners. The use of trademarks or service marks of another is not a representation that the other is affiliated with, sponsors, is sponsored by, endorses, or is endorsed by Wikinvest.
Powered by MediaWiki