Top 10 Takeaways: Is the Market Pricing Everything In?
Data Points For Your Investment Mosaic
1. Gartner reports worldwide IT outsourcing grew 8% in 2011 to $246.6 bn from $228.7 bn (5/21/12). Vendors with cloud based offerings and Indian providers were cited as the fastest areas of growth. Top 5 providers by revenue were IBM, HP, Fujitsu, CSC, & Accenture.
2. NASSCOM is concerned about US Visa probes on Indian companies (5/21/12). Infosys has been in the news lately as being investigated by the U.S. Department of Homeland Security.
3. Wipro is looking to do $1 bn in acquisitions over the next 18 months (5/21/12). The company is looking at deals in the $50 to $300 mn range. Rishad Premji (Chairman’s son) runs the M&A team.
4. WNS upgraded to BUY by Janney (5/23/12) due to desirable entry point. Takeaways: catalysts in place (large contract ramp, salesforce increases, & healthy demand) to drive revenue growth back to industry levels which should result in multiple expansion.
5. WNS opens US center (5/23/12). WNS announced its first delivery center in North America with the opening of its delivery center in Columbia, South Carolina. The center (capacity 300) will provide U.S. clients onshore services and solutions including F&A, research & analytics, and industry specific offerings.
6. Channel checks on the government IT spending front reveals continuous difficult environment (5/23/12). Takeaways: revenues are declining due to slower government IT spending, continues to be a naturally cautious tone, and up coming elections combined with continuing resolutions and potential sequestration imply no relief in sight.
7. HP reports results with HP Services change +2% q/q & -1% y/y (5/23/12). Takeaways: Within HP Services, Application and Business Services (which includes BPO) led growth +7% q/q and +1% y/y with IT Outsourcing lagging -1% q/q and -3% y/y.
8. ADP’s analyst day expounds on innovation initiative (5/24/12). Takeaways: ADP focused on innovation, interest rates expected to weigh on results over the short term, and underlining business fundamentals appear stable.
9. Just Sitting Hear Wondering: if after Tech stocks reported weak earnings the market has properly reset expectations for a rocky second half.
10. Was it any surprise that the Celtics couldn’t close out the Hawks in game 6? I would like to think they just enjoy playing basketball rather than what really happened was that they failed to execute.
Joseph D. Foresi