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For nearly twenty years, Doug Gerlach has taught individuals and investment clubs to make smarter decisions about investing in the stock market, through books, software tools, websites, and educational presentations across the U.S. Gerlach is the President of ICLUBcentral Inc., makers of... More
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  • AECOM Technology (ACM) Struggling In Global Slowdown, Possible Opportunity 0 comments
    Dec 5, 2012 11:48 AM | about stocks: ACM

    In the December 2012 issue of the Investor Advisory Service newsletter, our analysts updated their view of AECOM Technology (NYSE:ACM).

    The progress that AECOM Technology was making this year screeched to a halt. For the fourth fiscal quarter ended September 30, sales fell 2%. The Professional Technical Services (PTS) segment, the firm's dominant source of sales, fell 3%, while the smaller Management Support Services (MSS) segment grew 11%. The company is struggling with the contracting global economy, particularly Europe. Earnings took a big hit as AECOM recorded a $317 million after-tax impairment charge spread over both business segments. Without the charge EPS actually grew 10%, to $0.83, as previous cost-cutting efforts helped profit margins.

    For Fiscal 2013 the company is taking a cautious approach and expects EPS of $2.40-$2.50, up 4%-9%. The company indicated its best use of capital during this global slowdown is to aggressively repurchase stock and pursue accretive acquisitions.

    ACM is a buy up to 23. Our analysts see the potential for a 20% total annual return through 2017 if the company can meet our goals for EPS growth.

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Themes: growth stock investing Stocks: ACM
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