At least Accenture, a management consulting and technology outsourcing firm, has been benefiting from the current economic downturn. Companies looking to cut costs and streamline operations have contributed to the $6.77 billion in new bookings in Accenture’s recent FQ3. Yet Barron’s says the company has stayed under investors radars: They don’t realize Accenture (NYSE:ACN) is the one doing all that corporate downsizing for all those companies now. Its 14 times forward P/E is lower than the 18 times forward P/E that industry rival EDS (NASDAQ:EDS) was recently bought for. And Accenture has a strong balance sheet, with about $3.4 billion in cash and investments. It services 90% of all Fortune 100 companies, and is renowned for its dedicated corporate culture and seeing projects through to the end.
The blue-chip IT firm is thriving from helping
In Accenture’s latest FQ3 earnings call, CEO William Green said: “We grew operating income 27% and expanded operating margin by 70 basis points. Along with that our balance sheet continues to remain strong. We generated tremendous free cash flow of more then $1 billion in the quarter and we are continuing to return cash to shareholders. We have been steadily building a formidable leadership position investing in our business and increasing market share… You look at
Hans Wagner rates Accenture the third largest IT company behind IBM (NYSE:IBM) and now HP’s EDS. But Wagner notes Accenture is rapidly gaining market share and revenues are sharply up as demand for its services is so strong, it's been able to keep its prices high. Wagner notes one other thing going for Accenture: