Opinions
Darren Sissons
Infosys Technologies Ltd.
INFY-N
TOP PICK
Oct 13, 2017
Stock price when the opinion was issued
You might be interested:
This is an Indian outsourcing company. The question is whether it can get things done cheaper than anyone else. They don’t do anything special, though they have executed well. He cautions that Indian companies and many other emerging market companies do not have the governance rules that American and Canadian investors have come to expect. Infosys is a huge player but its CFO recently left and there has been other management turnover. He does not see this as positive. This stock has had a big recent run, but this is not a growth stock like Amazon or Google. He would not invest at this price.
(A Top Pick Jul 26/19, Up 14%) Great company, nothing wrong with it. He sold it to put cash into Accenture, ACN, a better company with more global scope.
Owned this for a couple years and did very well. A good company that is well run and has a strong balance sheet. The dividend grows. However, he sold it for Accenture which has a broader offering with media and government portions. The price is a little rich but it is high quality.
INFY operates as a global consulting firm and is now trading at 21.5x times' Forward P/E. In 1Q-2024, INFY’s revenue grew 4% to $4.62B, beating estimates of $4.61B and EPS was $0.17, slightly missing estimates of $0.18. The balance sheet is strong, with net cash of $1.1B. Over the last few years, the company generated solid cash flow which was returned mostly to shareholders through dividend increases and buybacks, we think the company has shareholder-friendly policies. The share price was under pressure due to the weak guidance for FY 2024, with growth for the whole year expected of around 1%-3.5%. We think given the challenging global economy, we think the result/guidance is acceptable. We would be comfortable holding at this valuation.
Unlock Premium - Try 5i Free
An IT outsourcing company. When Mr. Trump got into power, the first thing he did was to bash all the foreigners, and a lot of the stocks, plus some of the tech stocks, were heavily reliant on this sector. Historically, it has had a very, very strong record of growing earnings something like 20% for 15 years. Very, very strong balance sheet. On Nov 1, they come into a $2 billion share buyback. Dividend yield of 2.7%. (Analysts’ price target is $15.50.)