Opinions
John O'Connell, CFA
Accenture Ltd.
ACN-N
TOP PICK
Jul 25, 2017
Stock price when the opinion was issued
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Went down, came back up, but basically flatlined. He sold in July. Bought 46 companies in the last year to the tune of about $6.6B, but it hasn't ended up on the bottom line. Has 775,000 employees. Client base is very sticky.
Buy in 1/3's here around $353, $335 (his targeted entry point), and $320.
He still likes it, despite fears that the new president will reduce inefficiencies and this will impact ACN. He disagrees. ACN is very well-run. One third of profits pay dividends, another third buys back stock and the rest buys new consulting companies. A good model they execute well.
Consulting on new technology rollouts globally for small, medium, and large businesses. Companies are going to need a lot of help implementing generative AI processes. This name is in the sweet spot for that revenue. Companies have to do this or be left behind. Yield is 1.9%.
(Analysts’ price target is $354.04)Is hitting a 52-week low. It always trades poorly around its earnings report, but usually recovers. But this time, she doesn't see a recovery. They reported soft bookings, -6% YOY. Are now restructuring their services business, which she doesn't understand. Gross margins missed. She will likely trim her holdings.
The largest consulting company globally. It has morphed very nicely over the last 5 years, and has become the leading consultant towards the Internet and Cloud computing. Cloud computing is really just getting going. Companies need a lot of help in terms of analysis, and how to go about doing it and how to implement it. This is a huge free cash flow generating machine. Dividend yield of 1.9%. (Analysts’ price target is $133.50.)