Cognizant Technology Solutions Corp. (CTSH)

All Comments on CTSH

  • commenter
    Thinking
    ahead
    Jan 11 10:24 AM
    My 2008 Investment Prognosis [view article]
    CAT is trading at 13X with a 10-15% growth rate as far as the eye can see. It also pays 2.1% dividend yield, and has a steady record of dividend increases. It also is buying back stock and sales are 60% non-North America. CAT is not a housing play or a US consumer play. Maybe it was 10 years ago, but now it is more sensitive to Brazil (on the ground over 30 years there) than to Toll Brothers. (dics: I'm long CAT) Reply
  • commenter
    sparad
    Jan 05 09:52 AM
    How Much Longer Will Indian Outsourcers Offer Cost Advantages? [view article]
    Money does flow to the cheapest marketplace. As India elevates itself, wages will go up. This is the first issue.

    The second issue is there is more frustration in American companies and employees due to the lack of good English skills - verbal and written, as well as cultural differences (such as saying "yes" when asked questions).
    This is also shifting some companies to not offshore or hire those who cannot communicate well.

    So, China will acquire more positions (it's cheaper) and, if enough people     Reply
  • commenter
    will
    Dec 02 07:57 PM
    Goldman Cuts Estimates, Targets for Slew of Tech Stocks [view article]
    Goldman sucks. Whatever they say, do the opposite. They are crooks. That being said, they say tech stocks are weak. I say buy all you can. Don't let them BS you and steal your shares. Tech is the best play right now through March!!!! Reply
  • commenter
    jcrash
    Dec 02 10:34 AM
    Goldman Cuts Estimates, Targets for Slew of Tech Stocks [view article]
    Is there somewhere we can see these "cut" estimates? Downgrading someone like NVDA is just silly. The company is selling at a ridiculously cheap P/E and they are not indicating any slowdowns. Reply
  • commenter
    market
    master
    Nov 19 09:32 PM
    Credit-Suisse Smiles on Data Processors Accenture, Cognizant; Frowns on EDS, Affiliated [view article]
    Bryan Keane is an idiot. He just looked at a relative chart like the one referenced in the story and then wrote a story to justify the past (last 12 months') performance of the top two.

    ACN's recent signings have been far more heavily concentrated in IT (Capital Intensive) deals, which will seriously squeeze margins and put a sleeper hold on future mega deal pursuits. They can't afford to sign many more deals like they've been signing, and access to capital in the current environment will hamper growth in the low-lying fruit of IT-heavy deals.

    As for EDS, he apparently hasn't bothered to understand what's been going on behind the numbers. EDS has made some huge investments in its own infrastructure and built out its global delivery capacity, over the last several years. Free cash flow was constricted as a result, but it is now in position to digest a much higher rate of new contract signings over the next decade. With its strategic partnerships, EDS has trumped IBM by standardizing other outsourcers' "custom" solutions.

    I agree that Cognizant is a formidable contender in some regards, but no matter what happens to the Rupee or wages in India, the economic impact will affect all major players in this field, since all have built up a sizeable presence there. I personally believe the price/wage gap between India and the west will continue to close quickly, eventually eliminating much of the benefit of off-shoring to India. Other places (i.e., China, Vietnam, the former Soviet Bloc countries) will become the future low-cost providers. It is too early to tell which of the major outsourcing firms will be able to catch the bouncing ball, but I seriously doubt that a cash-strapped ACN will be able to keep up with the leaner -- and much more experienced -- EDS.

    Time will tell... but as far as investments are concerned, picking the two most expensive stock valuations (who are not industry leaders) is a recipe for financial ruin. Do your own due diligence, and never take advice from a bozo like this guy.     Reply
  • commenter
    Thomas
    Victor
    Nov 08 02:44 PM
    Cognizant’s Growth Will Come From Europe [view article]
    The lackluster Q4 guidance "doesn’t seem tragic at all" if it's just for a quarter but what if it is just the beginning of a lower growth phase for CTSH, INFY etc.?
    Reply
  • commenter
    Dave Morris
    Sep 22 12:35 PM
    Goldman Updates Favorite Tech Stocks Lists [view article]
    Being that I own Oracle and Cisco, I found the article to be informative and encouraging. Reply
  • commenter
    Brian Croner
    Sep 03 02:12 PM
    My Website
    Safety in Tech? You Betcha -- Barron's [view article]
    Ralph's comment makes sense to me as well. Since the tech industry so easily outsources its manpower, and to exagerate and say the dollar is closing in on the rupee and yuan, the tech brains required for industry stability have got to be domestic. I do think, though, that mobile provides stability for tech more than any other aspect. The dollar can gain against other currencies if mobile locks under it sufficiently. My question is what monopolies other than that of Big Media does mobile tear into? Reply
  • commenter
    Ralph F
    Sep 03 01:29 PM
    Safety in Tech? You Betcha -- Barron's [view article]
    I wonder whether large cap tech has done well because the dollar has taken a beating. That would also explain the pressure on the Indian outsourcing companies. Reply
  • commenter
    Hiren Doshi
    Aug 19 10:54 PM
    How Much Longer Will Indian Outsourcers Offer Cost Advantages? [view article]
    Dan,

    Interesting analysis but it completely ignores the impact of supply emerging from places like China, Vietnam, etc on the ability of Indian programers to demand hikes on scale of 15% yoy until 2107. According to me, China will start pumping out engineers faster than India in the next 4-5 years and by engineers I mean employable engineers capable of handling outsourcing work. This will bring some amount of sanity to this lopsided demand/supply picture and this frenzy of salary hikes will come down to a more reasonable 5-8% avg hikes every year in India.

    If China fails to rise up to this occassion, my personal belief is that it will hurt the overall offshore story as the industry cannot continue this growth rates with exisiting salary growths.     Reply
  • commenter
    ratsharp
    Aug 19 01:30 AM
    How Much Longer Will Indian Outsourcers Offer Cost Advantages? [view article]
    outdate way of analysis .. you can generate n no. of scenarios using x combinations of currency and wage inflation..

    why dont you take the PV of these benefits ... you will hit upon a new conclusion ( try it)...

    no effort made on assuming stochastic currency rates ..or a step function ... try to bring some novelty..try to incorporate cycles in your assumptions

    and again .. lots of numbers and information without any conclusion and insight on where are you leading us to ... dont tell me that we shd look forward to a possible event in 2017 ...     Reply
  • commenter
    Dayanand
    Aug 18 09:53 PM
    My Website
    How Much Longer Will Indian Outsourcers Offer Cost Advantages? [view article]
    Sankar,
    If you see my equation, it boils down to the fact that the USD will change from Rs 40 to Rs 23 in 10 years.This is based on the fact that USD was Rs 16 in 1990 and Rs 40 by 1998. So actually I am still conservative in my approach.

    I considered 10 years experienced professional just as a benchmark.The 3-5 exp folks comparison will also be in a similar line.

    D     Reply
  • commenter
    sankar.sajit
    h
    Aug 18 05:16 PM
    How Much Longer Will Indian Outsourcers Offer Cost Advantages? [view article]
    Dan,
    I think an exchange rate change of 5% / year is on the real high side - a more appropriate one might be like 10% every 5 years. Could you try your estimates based on this? Another way to compare might be to see how the per capita salaries differ between India and US as per your estimates and something like the Goldman Sachs BRICS report - I think the latter would give a different picture. Another point is that very few 10 yr old programmers are reqd - they would move into roles which bill much higher. A few companies like google, startups, telecom/ chip product cos require such talent. The regular IT shops uses more of the 3-5 yr experience folks for programming work.     Reply
  • commenter
    Dayanand
    Aug 17 10:44 AM
    My Website
    How Much Longer Will Indian Outsourcers Offer Cost Advantages? [view article]
    Deepak,
    The gist of your reply what I understand is "VALUE ADDITION". I agree with you on that point.It is the oldest business rule that has never changed nor will ever change.In essence, till you bring value addition to your customers they will keep on coming to you.The day you stop it they will go somewhere else.

    Till date the Indian consulting companies were bringing the value addition of "LOWER COSTS".But companies like Accenture, previously known as Andersen consulting were established in fifties and developed there expertise in helping the customers in improving their business processes.In fact in those days a consultant was purely hired for those reasons.

    <b>FIRST PROJECT BY ARTHUR ANDERSEN :</b> Accenture originated as the consulting division of Arthur Andersen which was founded in 1913 by Arthur Andersen and Clarence DeLany as Andersen, DeLany &amp; Co. Its origin goes back to 1953, when General Electric (GE) asked Arthur Andersen to undertake a feasibility study about payroll processing and manufacturing automation using computers for GE's Appliance Park manufacturing facility near Louisville, Kentucky. Arthur Andersen recommended installation of a UNIVAC I computer and printer, and GE agreed, which is the start of what became the first-ever commercial computer in the United States. Joe Glickauf was Arthur Andersen's project leader for the GE engagement and was responsible for the payroll processing automation, launching the era of data processing. Considered to be the father of computer consulting, Glickauf headed the Arthur Andersen administrative services division for 12 years.

    Accenture since its first project fifty years back has mastered the art of improving business processes of its customers , the most important thing to note is that it has taken them decades to master this.The challenge for Indian IT consulting companies is to mirror this achievement in years instead of decades.

    <b>WHEN CAN WE SAY INDIAN IT CONSULTING COMPANIES HAVE ACHIEVED THIS THRESHOLD? :</b> The day revenue per employee for Infy or Wipro is same as that of Accenture or HP. We all know its a long way to go....     Reply
  • commenter
    Deepak
    Shenoy
    Aug 17 10:19 AM
    My Website
    How Much Longer Will Indian Outsourcers Offer Cost Advantages? [view article]
    I'm in Bangalore where the "maximum" for 10 years of experience (equivalent to the 120,000 a year salary in say Northern California) is about 20-25 lakhs. (2-2.5million rupees) Your mileage may vary of course.

    Also it's not just about quality. The time differences is a huge issue in my opinion. Secondly communication skills vary, and the best communicators (in India) demand and get far higher salaries. Thirdly, process management is great for the lower cost jobs, but innovation is more important for moving up the value chain. We have not yet demonstrated our prowess in that field, at least not in the outsourceable dimension, if there is such a thing.

    I don't think you can outsource innovation unless you can outsource ownership as well. Innovation comes from the ability to benefit from the ends, not the means.

    IMHO, what will happen is that eventually there will be balance sheet transfers. Meaning a division of a big company gets transferred over to Mr. Wipro or Mr. Infosys. This then generates future cash flow, and then the Indian company can choose to have American Employees, or Indian employees or use people in Mexico, Argentina or Philipines - makes no difference.

    Now they're competing with HP, IBM and the like, which are a) more experienced in deal making, b) also have offices in India and other lower cost countries and c) have far bigger balance sheets and deal absorbing leverage.

    From a stock perspective this means a hit to P&amp;L upfront, dilutions or fund raising if necessary etc. If they go down this route (they have to, in my opinion) we will have to see how they pan out, since they haven't done this in any significant way earlier.

    Another thing is to spend money on a product framework that could be cross-sold among customers. It needn't be a software product - those can't be cross-sold effectively - but could be things like TPA services or wholesale agency networks for insurers, deal syndication for banking (buy prosper.com!) and so on.

    This is now an acquisition based process rather than the plain old gimme work and I'll do it. It's more like "We know your process well enough to take it over,manage it, give it to you for cheaper than you pay right now, and even use it to cross sell to others". Different ball game, different rules. We'll see how it pans out.     Reply
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