Joseph D. Foresi
After traveling with management, we maintain our BUY rating on Genpact as we believe the company will produce better than market returns over the short and long term. Genpact is well positioned to capitalize on a healthy BPO demand backdrop. The company’s GE lineage and global reach serve as a distinct competitive advantage. The challenge …
Joseph D. Foresi
Back to Market Analysis home The sprint is on until the end of 2012. Recent stock price movements look sustainable in the absence of 2013 visibility, which we don’t expect this quarter. Investors remain locked in their positions, “Playing Prevent Defense Until Year End”. The decision to trim positions at 52-week highs is the easy …
David J. Koning CFA
Back to Market Analysis home Remain selective in IT Services, favoring CTSH/BPO providers, but would look to get more constructive around pullbacks in Neutral-rated stocks. CTSH is our best idea, given expectations for reaccelerating yoy revenue growth in Q4 (high historical correlation of growth acceleration and multiple expansion). Highlights from our recent trip to the …
Joseph D. Foresi
Back to Market Analysis home INVESTMENT CONCLUSION: We maintain our NEUTRAL rating on Paychex following better than forecast first quarter results. Paychex lacks a immediate catalyst as new business formation remains muted and margins are held back by investments. There is the potential that the company loses market share to technology based vendors over the …
Joseph D. Foresi
Back to Market Analysis home The market has moved up recently, implying the economy has improved. Although there may be small incremental gains, we are far from being out of the woods in our opinion. We are getting indications that demand is stable in the outsourcing group, but no indications of acceleration. The net result …
Joseph D. Foresi
Back to Market Analysis home INVESTMENT CONCLUSION: We caught up with BPO industry analysts NelsonHall. First half 2012, BPO deal conversion rates have been hampered by macro factors and risk aversion following a strong 2011, potentially leading to pent up demand. There is an increasing focus on domain expertise, which translates into a Race Up …
Joseph D. Foresi
Back to Market Analysis home VanceInfo reported quarterly results roughly in line with expectations. FY12 revenue guidance was raised but FY12 EPS guidance was lowered as the company attempts to shift impacted employees to other projects as a result of cancellations with two large clients. Synergies of the merger with hiSoft include scale to compete …
Joseph D. Foresi
Back to Market Analysis home The outsourcing space is facing two factors heading into 2013. The first is the macro. The space is at a critical juncture with price declines taking place, but contained to specific verticals (capital markets). If the macro remains stable, then the problem is contained, but if it deteriorates we could …
Joseph D. Foresi
Back to Market Analysis home Earnings season came to an end this week for the outsourcing group. Cognizant reported solid results and maintained 2012 guidance. The results ended the season on an up note. As we cross through the mid point of the year (2012), we turn our attention to 2013 prospects. The demand environment …
Joseph D. Foresi
Back to Market Analysis home VanceInfo reported quarterly results roughly in line with expectations. FY12 revenue guidance was raised but FY12 EPS guidance was lowered as the company attempts to shift impacted employees to other projects as a result of cancellations with two large clients. Synergies of the merger with hiSoft include scale to compete …
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