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Strategies & Market Trends : Disciplined Investing, especially the NAIC way -- Ignore unavailable to you. Want to Upgrade?

To: The Philosopher who wrote (429)	3/2/2004 2:34:26 PM
From: - with a K	Read Replies (1) \| Respond to of 469

Funny you should ask! I evaluated ACS just the other day, using a non-NAIC approach and came to the conclusion it was a buy. Cross posted from Value thread: I bought ACS, Affliated Computer Services, thinking it would continue to benefit from outsourcing trends and repeat business (90% of 03 revs were recurring). Gartner estimates worldwide Business Processing Outsourcing market at $131bil, growing at 9% compounded. ACS gets 74% of revs from BPO. I found ACS last week screening on MSN for stocks with the following attributes: 10 rating, "A" valuation, "A" fundamental, rev and eps growth >15%, net profit margin >10%, ROE >16%, debt/e <.4 but with a slightly "broken chart." ACS has a strong history of consistency: 37 consecutive qtrs of double digit EPS growth and has not missed guidance since 1994. Has a culture of frugality (spends only 1.4% of revs on sales and marketing!) Does 57% govt, 43% commercial, which could improve with recent acquisition of Lockheed Martin commercial unit. Acquired part of Andersen WW in May 02. Has 40,000 people supporting client operations in nearly 100 countries. In the news recently for investigation over a $7mil contract and sold off, but it does $4bil in sales. PE at pre-bubble lows. P/Sales 1.54. Strong fundamentals and low debt: finance.yahoo.com History of strong growth: research.businessweek.com. On S&P's Top 10 portfolio list -- those issues it considers to be the best candidates for capital gains over the next 6 to 12 months. Company: ACS Date: 2/26/04 Next year's expected earnings: $3.05 EPS growth rate used for estimate: 17 (vs. consensus of 20% and historic 25%) P/E maximum used for estimate: 17 Graham Fair Value: $109.51 Current Price: $48.89 $ difference: $60.62 Percent Growth to Fair Value: 123.99% Current price appears to me to be at straight line support of rising lows: stockcharts.com[h,a]wacly... ACS vs. competitors: quicken.com. News: DALLAS, March 1 /PRNewswire-FirstCall/ -- ACS announced today that it has signed a seven-year extension of its information technology (IT) outsourcing contract with the City of Carrollton, Texas. The term of the extension, valued at more than $30 million, began November 1, 2003, and now runs through September 30, 2010. DALLAS, Feb. 24 /PRNewswire-FirstCall/ -- ACS (NYSE) announced today that it has signed a $2.1 million contract amendment to provide care coordination and management solutions for two Louisiana Medicaid programs. NEW YORK, Feb 3 (Reuters) - Affiliated Computer Services Inc., which manages contracts for governments and businesses, on Tuesday said Florida officials were investigating possible irregularities in one of its contracts with the state. The company said a Florida inspector general had found "errors and possible irregularities" in a $7 million contract for the state labor department that expired June 30 and was not renewed.

To: The Philosopher who wrote (429)	3/2/2004 4:22:46 PM
From: Steven Dopp	Read Replies (1) \| Respond to of 469

ACS is an interesting choice as my stock club bought it in December.

To: The Philosopher who wrote (429)	3/2/2004 5:56:29 PM
From: EL KABONG!!!	Read Replies (2) \| Respond to of 469

Hi Chris, I also considered ACS as an investment, quite recently in fact. Eventually my decision came down to one of two stocks, either ACS or UTSI (UTStarcom). I ultimately decided to go with the higher risk/ potentially higher reward UTSI, but the decision was difficult. Both companies have a lot going for them at the moment. My SSG showed an upside/downside ratio of about 3.1:1 for ACS, and 4.9:1 for UTSI. Also, I used extremely conservative estimates for revenues/earnings growth for UTSI (chopping historical and future growth rates almost in half, as "unsustainable"), whereas for ACS I used the analysts' guidelines minus a 10% "margin of error fudge factor". But both companies seem to be excellent prospects for the near term future. Hope that ACS works out well for you and your club... KJC

To: The Philosopher who wrote (429)	3/5/2004 1:14:39 PM
From: - with a K	Read Replies (1) \| Respond to of 469

I finally got around to doing a SSG for ACS. It came out a "buy" up to $61 using a low price of $32, ave. high PE of 27.5, and EPS growth of 14.2%. Up/down of 3.8/1. 33% zones. Not the strongest of results, and a little concerned with the declining ROE. But I like the rising pre-tax income (2A) since 200. All my judgment and opinion, of course.

To: The Philosopher who wrote (429)	3/8/2004 10:45:40 AM
From: - with a K	Read Replies (1) \| Respond to of 469

ACS upgraded at Deutsche 50.46: Deutsche Bank upgrades Affiliated Computer to Buy from Hold, as they think the commercial mkt's shift to smaller deal sizes benefits the co; firm favors the co's model and competitive position in the HR BPO mkt, and thinks that over time the co will gain disproportionately more mkt share; firm also thinks the co's biggest mkt vertical, state/local govt, is approaching a bottom in fiscal fundamentals.