Thursday, May 8, 2014

Accenture (ACN) 2014 Review

Accenture Ltd is a global leader in management and technology consulting services and outsourcing solutions with 200 offices in 56 countries.  The company has generated an impressive 50%+ return on equity over the last five years while growing earnings per share and dividends 13-15% annually.  ACN should be able to continue this trend as a result:

(1) demand outsourcing services are rising rapidly,

(2) Accenture’s strong financial condition will allow it to continue its aggressive stock buyback program,
           
            (3)  acquisitions.

Negatives:

(1)    its large international business subjects it to the risk of currency fluctuations,

(2)    the global slowdown is impacting its consulting services,

(3)  highly competitive industry.

The company has virtually no debt, is rated A++ by Value Line and pays a dividend providing a 2.4% yield.

Statistical Summary

                 Stock      Dividend        Payout      # Increases 
                Yield      Growth Rate     Ratio       Since 2006

ACN          2.4%           11%            39%              6*
Ind Ave      1.9              11               35                NA

                 Debt/                       EPS Down       Net        Value Line
                 Equity       ROE      Since 2004      Margin       Rating

ACN          1%            65%           1                  10%           A++
Ind Ave     19              20            NA                 12            NA

*ACN has paid a dividend for 7 years.

     Chart

            Note: ACN stock made great progress off its September 2008 low, quickly surpassing the downtrend off its September 2008 high (straight red line) and the November 2008 trading high (green line).  Long term, the stock is in an uptrend (blue lines).  Intermediate term it is a trading range (purple lines).  The Aggressive Growth Portfolio owns a full position in ACN.  The upper boundary of its Buy Value Range is $55; the lower boundary of its Sell Half Range is $93.
  


5/14

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