Infosys Technologies Limited (ADR) (INFY)

floridabuilder (99.83) Submitted: 1/09/08 12:48 AM : Start Price: $45.18 INFY Score: 6.69

Macro: There was a time when many Indians wanted an overseas assignment... now they want to stay in India because that is where the action is... India has an enormous advantage over other countries when it comes to computer services (education, pool of people and English language).... India is one of the BRIC countries and although its economy will slow, it will not grind to a halt like the US... I expect the Rupee to gain ground against the dollar... this will allow India to invest in US assets on the cheap to offset lost $'s in computer services....

Technical: the chart is terrible as the 50 day is lower than the 200 day and we get lower lows and lower highs... although i purchased for CAPS, wait until the next earnings report to decide if the Indian IT market is a good place to bet

Fundamentals: PEG .83... usually beats earnings by a few pennies... remember the good old days when techs traded at a PEG of 20? there is a transformation occurring in this industry... the top companies are trying to get high margin KPO work vs. low margin BPO work (see INOD seeking alpha conference call notes on 11/14)... also this was noted in the economist (KPO work) when they reviewed India.... I have read where INFY is ahead of the competition in this regard

Industry: 2nd highest market cap in computer services group behind IBM (negative outlook)... note that IBM's sales are some 25x as much, so their size is enormous in this industry group

My Target Price: $70

Infosys Technologies Limited, a technology services company, defines, designs, and delivers information technology (IT) enabled business solutions. The company, together with its subsidiaries, provides various services, including custom application development; maintenance and production support; software reengineering; package evaluation and implementation; IT consulting; and other solutions, such as independent validation solutions, operations and business process consulting, engineering services, business process management, systems integration, and infrastructure management services.

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