FTI Consulting (NYSE: FCN) provides
forensic/litigation services to major corporations, financial institutions and law firms. Company experts offer investigative services to firms facing fraud, disclosure, and malpractice issues, to assist them in their legal defense or pursuit of recoveries. FTI also serves its clients with expert testimony and corporate restructuring services. In addition, FTI offers economic consulting and advises clients on merger & acquisition deals and regulatory matters. The firm serves more than 1,000 clients through about 30 offices in the US, the UK and the Asia/Pacific region.
The company pleased investors last week, when it reported Q4 EPS of 60 cents and revenues of $280.5 million. Analysts had been expecting 58 cents and $260.2 million. Management also guided FY08 EPS to $2.40-$2.50 ($2.36 consensus) and FY08 revenues to $1.27-$1.30 billion ($1.15B consensus). Stifel Nicolaus and Boenning & Scattergood subsequently reiterated "buy" and "market outperform" ratings on the issue, respectively.
The share
price popped on the news and then moved into a bullish "pennant" consolidation pattern. Stocks frequently exit pennants moving in the same direction they were traveling on entry. In this case, that would be to the upside.
Altogether, brokers recommend the issue with six "strong buys", six "buys", two "holds and one "sell". Analysts expect a 20% growth rate, through the next year. The FCN Price to Book ratio (3.22), Sales Growth rate (29.38%), EPS Growth rate (42.86%) and Operating Margin (18.58%) compare favorably with industry, sector and S&P 500 averages. Institutional investors hold about 95% of the outstanding shares. Over the past 52 weeks, FCN has traded between $32.55 and $64.83. A stop-loss of $55.00 looks good here.
Larry Schutts is a contributing editor for Theflyonthewall.com and the Vice-President of Stockwinners.com. He does not hold a position in the stock discussed above.
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