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Accenture: A Bold Claim Supported By Evidence

Aug. 01, 2019 7:51 PM ETAccenture plc (ACN)4 Comments
Marc Gerstein profile picture
Marc Gerstein


  • Accenture claims "'The New’ — Digital, Cloud, Security Services” accounting for “More than 60% of revenues” and is “experiencing strong double-digit growth."
  • What’s not to love about that — if it and its implications are for real.
  • As many have learned the hard way, however, sometimes cutting edge talk is just that, talk.
  • But here, classic fundamentals combined with technical stock characteristics suggest this outfit is for real.

Supporting materials accompanying Accenture’s (NYSE:ACN) latest earnings release point to “‘The New’ — Digital, Cloud, Security Services” as accounting for “More than 60% of revenues” and “experiencing strong double-digit growth.” In a stock market obsessed with FAANG stocks and so-called “unicorn” IPOs, what’s not to love about that! As many have learned the hard way, however, sometimes cutting edge talk is supported by the numbers, and sometimes, it’s just talk. With Accenture, the combination of old-time classic fundamentals and technical stock characteristics combine to look good, enough so to suggest this outfit is for real.

© Can Stock Photo / pressmaster

Why Look At Accenture

I rely heavily on stock screening to narrow my focus from the big unwieldy market to a small number of stocks for which there are objective indications that they are particularly worthy of attention. Accenture appeared recently in the Chaikin Analytics Bullish Swing Trade screen, which identifies stocks with strong technical and fundamental profiles that present as being short-term “oversold.” Though the name of the screen may conjure images of a quick in-and-out trade, my testing of the screen suggests it presents well even if we assume three-month holding periods.

A 21st Century Consultant-Outsource Firm

Accenture’s basic businesses are hardly new. Management consulting, those so-called outside experts called in to supposedly help senior executives figure out what they should be doing and how they should be doing it, is an age-old activity well known not just to the brass that cuts the checks for the billable hours but also to the rank-and-file who leerily eye the suits and wonder what sort of trouble they’re cooking up. Outsourcing, meanwhile, is now so well established as to have become a Hollywood theme and, lately, inspiration for a political crusade.

But rather than sticking around within the

This article was written by

Marc Gerstein profile picture
As Director of Research at Chaikin Analytics, I have long specialized in rules/factor-based equity investing strategies. While I understand quant investing, including factors and what not, I don't agree with what they do. Rather than be obsessed with statistical studies that are no good for any time periods other than the ones studies, I combine factor work with the underlying theories of finance that tell us why they work or don't work You can follow me on Twitter at @MHGerstein or at my new blog: ActiQuant.com In addition, I formerly managed a high-yield fixed-income fund and conducted research involving quantitative asset allocation strategies such as are at the foundation of what today has come to be known as Robo Advising. I formerly edited the the Forbes Low Priced Stock Report, and served as an assistant research director at Value Line. I have long had a passion for investor education, which has resulted in my having conducted numerous seminars on stock selection and analysis, and the authoring of two books: Screening The Market and The Value Connection.

Analyst’s Disclosure: I/we have no positions in any stocks mentioned, but may initiate a long position in ACN over the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.

Reprinted from my blog at Actiquant.com

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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Comments (4)

ACN is a great company that I think flies under the radar unnoticed for many investors. I also think it is a great way to play cloud technology, because ACN will benefit if/when companies move computing capability and data to the cloud, no matter which cloud that happens to be.
Got in on IPO 14.50, I never look at it.

Well done on the article.
The . . . Real . . . Deal
Henry Miles profile picture
Owned it for years; perpetually appearing to be overvalued except that it isn't.
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