Validea's pick of the week provides a detailed report on a company that scores well in the stock-screening service's model portfolios. On Validea.ca, investors can analyze 1,000 Canadian stocks through 12 different guru-based models and get individual reports on each company. Globe Investor provides marketing and data services to Validea.ca and receives compensation. Try it.
Syntel Inc. is a global provider of integrated information technology and knowledge process outsourcing solutions spanning the entire lifecycle of business and information systems and processes. It has a market cap of $3.5-billion (U.S.) It provides business analytics, cloud computing, IT infrastructure management, and other services.
The company has grown earnings at a 21-per-cent pace over the long term (using an average of the 3-, 4- and 5-year EPS growth rates), which the Peter Lynch based model likes. The Lynch model also likes its 0.72 PE-to-growth ratio.
It has a debt/equity ratio of just 13 per cent and has upped EPS in all but one year of the past decade, which the Warren Buffett-based model likes. It has averaged a 21.1-per-cent return on retained earnings (those not paid out as dividends) over the past decade, which Buffett model also likes.
Syntel trades for a reasonable 15 times ttm EPS. It has a strong 30-per-cent return on equity over past decade, impressing the Buffett model.
The company has an impressive 25-per-cent profit margin, far exceeding the -3 per cent computer services industry average.
Current ratio is 4.5, demonstrating excellent liquidity, according to the Benjamin Graham-based model.
John Reese is long SYNT.
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