Wrap up paragraph from Red Herring -
ALL THE STOCKS ARE ATTRACTIVE
So, with all of these companies basically performing well, which one is the best investment? Looking at valuation metrics doesn't offer a clear winner, as the companies currently trade at similar earnings multiples and have nearly identical growth rates. EDS is valued at 23 times its estimated 2001 earnings, while CSC and IBM trade at multiples of 21 times their estimated earnings. ACS is the priciest, but not by much, at 25 times 2001 earnings estimates.
According to First Call, EDS's earnings are estimated to increase 16 percent, compared to 11 percent growth for CSC and 12 percent for IBM. Both EDS and CSC have the same expected long-term growth rate of 15 percent, compared to IBM's 14 percent. For the year, smaller ACS has the highest earnings growth rate, with analysts predicting an increase of 19 percent this year and 20 percent annually over the next three to five years. So, even though the stock is slightly more expensive than its larger rivals, it looks like it's worth a premium, given the higher growth expectations.
But what's clear to us is that investors should play the long-term outsourcing trend by investing in one of the established players. And with one big contract win after another, including last year's much-sought-after $6.9 billion Navy and Marine Corps intranet contract, EDS appears to have the most momentum among the bigger companies
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