boilermaker75 Posted June 4, 2013 Share Posted June 4, 2013 Infosys Limited is a company headquartered in India that provides business consulting, technology, engineering, and outsourcing services worldwide. INFY’s market cap is $24.82 billion, the EV is $19.52 billion, and the TTM FCF $1.354 B. The EV/(TTM FCF) = 14.42. The TTM gross margin is 37%, which is the first time it has been below 41% in the last 10 years. I have not read the annual report yet to see if this is a concern. The TTM operating margin is 25.8%. Revenue has grown from $1.1B to $7.4B over the last 10 years and shareholder equity has grown from $3.8B in 2009 to $8.5B in 2013. The FCF has not grown over the last 4 years, which I have not looked into the reasons why yet. The FCF return on equity is 18.5%. The 52 week share price range is $37.93 to $55.71 and INFY closed at $43.43 yesterday. There has been no change in the number of outstanding, or diluted, shares in the last 5 years. I have more digging to do, especially reading some ARs, but I will probably be interested at prices below $40. So I will probably be looking at writing some $40-strike puts. Link to comment Share on other sites More sharing options...
Yours Truly Posted June 4, 2013 Share Posted June 4, 2013 You can include CTSH which I believe is a superior company to INFY Link to comment Share on other sites More sharing options...
boilermaker75 Posted June 4, 2013 Author Share Posted June 4, 2013 You can include CTSH which I believe is a superior company to INFY Thanks for pointing out CTSH, it is one I will watch. But where they are currently trading, I am much more interested in INFY. I wrote some July 40-strike puts for $1.05 per share today. That would give me a cost basis of $39 per share and an EV/(TTM FCF) = 12.9. CTSH is currently trading at $65.44 and would have to drop to about $40 a share for an equivalent evaluation. Even if I don't get put to, the $1.05 gives me a return of 2.56% for 46 days, an almost 20% annual rate. Link to comment Share on other sites More sharing options...
muscleman Posted June 5, 2013 Share Posted June 5, 2013 If I remember correctly, this company was a fraud a few years ago. Maybe I was wrong, but you have to be careful. Link to comment Share on other sites More sharing options...
boilermaker75 Posted June 5, 2013 Author Share Posted June 5, 2013 If I remember correctly, this company was a fraud a few years ago. Maybe I was wrong, but you have to be careful. Is this what you were recalling? http://blogs.wsj.com/cio/2012/08/01/infosys-visa-fraud-trial-should-leave-cios-worried/ Link to comment Share on other sites More sharing options...
turar Posted June 5, 2013 Share Posted June 5, 2013 I think he meant Satyam. http://en.wikipedia.org/wiki/Satyam_scandal Link to comment Share on other sites More sharing options...
no_free_lunch Posted June 6, 2013 Share Posted June 6, 2013 I was thinking about this after reading the posts and came to the conclusion that in the space IBM might be a better investment? For starters the PE is similar so you are not paying much of a premium. IBM has significant Indian (and other low-cost country) operations so should be able to harness much of the labor arbitrage as well. They also have the name brand which is HUGE for CIOs. I think they are the biggest patent holder in the world, or used to be at least and still have significant commercial software. Basically you are getting a tech mutual fund of offshored services, offshored/inshored software products (considered by some best of breed), some hardware. You also have the Buffet stamp of approval. In the past INFY has been a fast grower but have slowed lately, so I am not even sure you would get much of a faster growth rate with them. Just a thought. Link to comment Share on other sites More sharing options...
oddballstocks Posted June 6, 2013 Share Posted June 6, 2013 I was thinking about this after reading the posts and came to the conclusion that in the space IBM might be a better investment? For starters the PE is similar so you are not paying much of a premium. IBM has significant Indian (and other low-cost country) operations so should be able to harness much of the labor arbitrage as well. They also have the name brand which is HUGE for CIOs. I think they are the biggest patent holder in the world, or used to be at least and still have significant commercial software. Basically you are getting a tech mutual fund of offshored services, offshored/inshored software products (considered by some best of breed), some hardware. You also have the Buffet stamp of approval. In the past INFY has been a fast grower but have slowed lately, so I am not even sure you would get much of a faster growth rate with them. Just a thought. The work that Infosys does is work that IBM won't do as far as I know. IBM is a *services* company, but they're also a product company, they sell a product like MessageBroker then sell services around it. Their services are pushing their products, which of course makes sense. Link to comment Share on other sites More sharing options...
no_free_lunch Posted June 6, 2013 Share Posted June 6, 2013 IBM will sell business process/IT services as well. It is not necessarily sent overseas but they do provide the service. It's a gargantuan company, they do pretty much everything. http://www-935.ibm.com/services/us/en/it-services/human-resources-learning-and-recruiting-outsourcing.html http://www-935.ibm.com/services/us/en/it-services/it-outsourcing/index.html Link to comment Share on other sites More sharing options...
ccplz Posted March 9, 2017 Share Posted March 9, 2017 Anyone still following Infosys at the current price? Link to comment Share on other sites More sharing options...
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