The identification of new business trends and the subsequent implementation of strategies based on those trends is vital to corporate growth. When firms need help along those lines, they often turn to a Hamilton, Bermuda consultant that currently works with two-thirds of the Fortune Global 500.
Accenture (NYSE: ACN) is the world's largest management and technology consulting firm. It offers clients enterprise integration, human resources, strategic planning and supply chain management services, across 18 industry groups. The company operates from more than 100 offices in 49 countries. It has established business alliances with a variety of sector leaders, including Hewlett-Packard (NYSE: HPQ), Oracle (NASDAQ: ORCL) and Reuters Group (NASDAQ: RTRSY).
Last week, the firm reported fiscal Q1 EPS of 60 cents and revenues of $5.67 billion. The Street had been expecting 56 cents and $5.46 billion. Management also guided Q2 revenues to $5.50-$5.70 billion ($5.31B consensus) and FY08 EPS to $2.36-2.41 ($2.26 consensus).
ACN shares popped into a bullish "flag" consolidation pattern on the news. Stocks frequently exit flags moving in the same direction they were traveling when they entered them. In this case, that would be to the upside.
Brokers recommend the issue with six "strong buys," nine "buys" and five "holds." Analysts see a 14% average annual growth rate through the next five years. The ACN P/E ratio (17.97), PEG ratio (1.31), Price to Sales ratio (1.28), Price to Cash Flow ratio (12.74), Price to Free Cash Flow ratio (16.71), Sales Growth rate (19.27%), EPS Growth rate (30.43%), Return on Assets (18.26%), Return on Investment (55.13%) and Return on Equity (72.69%) compare favorably with industry, sector and S&P 500 averages. Institutions hold about 59% of the outstanding shares. Over the past 52 weeks, the stock has traded between $33.03 and $44.03. A stop-loss of $32 looks good here.
Larry Schutts is a contributing editor for Theflyonthewall.com and the Vice-President of Stockwinners.com. He does not hold positions in any of the stocks mentioned above.
Closing Bell: Economic Catapult for Thanksgiving & Black Friday (WMT, TGT, GRMN, GOOG, MSFT)
Deere up on Q4 earnings performance
Reid Hoffman: LinkedIn will go public (at some point)
